Cake DeFi’s new loan service to accept crypto as collateral

Cake DeFi, a Singapore-based fintech platform, has launched a decentralized finance (DeFi) service that allows users to get loans using cryptocurrency as collateral.

Cake DeFi co-founders Julian Hosp (left) and U-Zyn Chua / Photo credit: Cake DeFi

With the new service – which is called Borrow – customers can take a loan in DefiDollars (DUSD), using their bitcoin, ether, tether, USD Coin, or DeFiChain as collateral, which will cover 200% of the loan at an annual interest rate of 5%.

The loaned currency can then be spent to buy items or for investments. Cake DeFi said it will accept the digital currency for its other services including lending, staking, and liquidity mining, either directly or after swapping it with other coins.

Citing a study by fintech firm Stilt that suggested that 94% of crypto users were either Gen Z or millennials, Cake DeFi co-founder Julian Hosp said that there was strong demand for personal and commercial loans that accept crypto as collateral.

Southeast Asia accounts for 10% of the DeFi firm’s user base.

In March, the firm launched Cake DeFi Ventures (CDV), a new VC arm with US$100 million in earmarked capital.

CDV will invest in startups operating in the Web3, gaming, and fintech industries, focusing especially on firms with offerings in the metaverse, non-fungible token, blockchain, and esports spaces over the next two years.

See also: No crypto for old men?