Crypto enthusiasts looking to take decentralized finance to a new level might be excited to learn about CoinRabbit Review
CoinRabbit is a crypto lending platform that facilitates lending between investors and borrowers. Borrowers can use the loans for any kind of expenses, including further crypto investing†
But borrowers should be wary that their loans could be called out. And investors should be careful because they could lose their money. Whether you’re a borrower or a saver, here’s what you need to know about CoinRabbit.
Earn up to 10% returns when lending stable coins Borrow stable coins with crypto as collateralSell short tokens using “bear market lending”
Lenders/Investors: 10% APY
Borrowers: 14% APR
What is CoinRabbit?
CoinRabbit is a cryptocurrency lending platform that enables crypto lending. Founded in 2020, the company aims to make cryptocurrency work as a traditional currency for holders and lenders.
With this in mind, CoinRabbit is working to create a platform where lenders can earn interest without the risk of losing their assets and borrowers can take out loans without fear of losing their underlying collateral.
The company partners with ChangeNow.io for exchange services and Guarda.com for asset protection services. However, the “meat and potatoes” of the P2P forum is CoinRabbit’s platform.
What does it offer?
CoinRabbit provides a P2P lending platform for crypto and stable coin owners. It facilitates both sides of the trade and allows borrowers to take out both Bull and Bear Market loans. These are some of the more unique features.
In bull market lending, borrowers use crypto as collateral to borrow stable coins (such as USDC or USDT). These loans have unlimited maturities.
The interest on bull market loans is 14% APR and is accrued monthly. All interest must be paid before the collateral is returned.
Note that if the token used for collateral falls by 45% from the borrowed token, the loan will be called and the collateral will be liquidated. CoinRabbit says it will notify you by text and email if your loans reach any of its three limit zones, allowing you to add collateral to avoid liquidation.
Interest Accounts (Earn)
CoinRabbit has interest accounts that currently yield 10% annual returns. The minimum deposit on these accounts is $100 and there is a maximum deposit of $1,000,000 in stablecoins.
Savers can withdraw their savings directly from CoinRabbit – which is a nice improvement.
Are there any costs?
CoinRabbit boasts that there are no fees, but this is not entirely true. Borrowers who take out loans for less than 30 days will pay a fee of $100 (or an equivalent token) for each loan.
It also appears that CoinRabbit could take a cut in the profit of a loan. While borrowers pay 14% APR on all loans, investors are only promised a 10% return on their coins. That leaves a 4% gap that we can only assume CoinRabbit takes a chunk of.
CoinRabbit says it never charges withdrawal fees. But it should be noted that it Terms & Conditions page says that if investors withdraw their money in less than three months, not only will they lose their accrued interest, but they will “pay all network fees for the withdrawal.”
How does CoinRabbit compare?
CoinRabbit’s interest rates are solid if you want to lend assets. Investors will only see a few crypto interest accounts that offer higher yields than CoinRabbit.
However, CoinRabbit’s advertising policy raises red flags. For example, the company markets itself as “Fee-Free and Transparent,” but borrowers pay fees for loans held for less than 30 days, and lenders must pay the network fees for assets withdrawn within three months.
The company has improved the clarity of their terms and conditions, but we still think it could be easier to understand the risks. If the collateral decreases in value by 45%, the loan is called.
At the moment, CoinRabbit does not have the maturity of more established crypto lending platforms such as BlockFi or Celsius network† Here’s a closer look at how it compares.
How do I open an account?
Loans and interest accounts can be opened in minutes on the CoinRabbit website. CoinRabbit’s authentication process is sparse. Instead of a traditional account (where users follow) Know your customer laws), users only need a phone number and crypto address to open their accounts.
Is it safe and secure?
CoinRabbit has had no significant breaches. And assets used as collateral are kept in cold storage with various Guarda portfolios. The company also allows instant withdrawals, which should calm the mind.
All customers can also always protect their accounts with an additional 2FA layer of security.
Although CoinRabbit says that “Your money is protected and insured”, it does not explicitly explain how. It’s also uncomfortably vague about its security practices. Although it relies heavily on its partnerships, the company must pass information to its partners through APIs. If these transmissions are not encrypted in transit, private keys are at risk.
But beyond a vague reference to “secure APIs to be accessed over a virtual private network,” security details are sparse. The terms and conditions do not specify insurance policies, nor do they require CoinRabbit to store assets with a specific secure third party. Also, CoinRabbit advertises that it does not KYC which could later get them in trouble with US regulators.
Finally, it is worth noting that using a crypto lending platform comes with an inherent risk taking as borrowers and savers have to transfer their private keys to a third party. Once crypto keys are transferred from you, they become the property of another entity. And there’s no way to guarantee they won’t be stolen.
How do I contact CoinRabbit?
Details on how to contact CoinRabbit are scarce. The company has a Chat Now feature at the bottom right of the website. The chat is available 24/7 and they claim to have a response time of 10-12 minutes to all your questions.
Users can also contact customer service at [email protected]
Information about head offices and telephone numbers is not published on the website. You’ll have to dig into the terms and conditions here to find the headquarters:
Rabbit Finance LLC.
First St Vincent Bank Ltd Building
James Street, Kingstown, St Vincent and the Grenadines
Is it worth it?
Right now, crypto enthusiasts want to check out CoinRabbit or start small before diving in. It has good products with strong interest rates. But we would like to see a longer track record and more transparency.
For now, it might make more sense to use a more established crypto lending platform that offers greater transparency regarding asset insurance, fees and processes. Over time, CoinRabbit can become an excellent crypto lending platform and we continue to see them improve their platform.