Lending at Bitvavo
Summary
This article explains how Lending at Bitvavo works, how you can participate, and what to expect when buying certain digital assets that require Lending participation. You'll also find information about how rewards are calculated, when they’re paid, and what to do if you no longer wish to take part in Lending.
What is Lending?
When you enable Lending at Bitvavo, you can earn weekly rewards on supported digital assets. Your assets are made available through Bitvavo Custody BV and can be used in different ways, such as supporting liquidity on the Bitvavo platform, enabling margin trading, and staking where available. This helps support the platform and, in return, you receive rewards on the assets you lend.
There are two types of Lending in the Lending Program:
- Global Lending: This applies to all supported digital assets on the Bitvavo platform. Global Lending is optional and can be turned on or off at any time in your account settings.
- Lending for specific Lending-Enabled assets: For a small number of assets, enabling Lending may sometimes be required. This helps support liquidity for assets that are traded less actively, so trading can remain smooth and costs can stay lower. In these cases, professional parties can use the assets to help maintain a healthy and active market. This only applies to a limited number of assets and is removed automatically once normal trading conditions return.
How can I participate in Lending at Bitvavo?
There are two ways to participate in Lending:
-
Global Lending
You can enable Global Lending in your Earn settings for supported digital assets on Bitvavo. This is optional and can be turned off at any time. -
Lending-Enabled Assets
For some assets, Lending must be enabled before you can buy them. If this applies, you’ll be asked to give your consent before you buy the asset. Once enabled, your consent applies to all Lending-Enabled Assets, and rewards are applied automatically to assets in this category that you hold.
You can find more information in our User Agreement and Risk Disclosure.
How do I opt out of these Lending-Enabled Assets?
In the Global Lending Program, Lending is optional, so you can enable and disable Lending via your Earn settings.
Currently, if you opt-in for the lending of Lending-Enabled Assets, you cannot opt out of Lending for these assets manually in the settings. If you no longer wish to participate in Lending for these assets, you can either:
- sell the asset, or
- withdraw the asset.
How are Lending reward rates determined?
Bitvavo Lending reward rates are dynamic and influenced by supply and demand in the market. They are reviewed regularly and may change over time. For more information, you can refer to Bitvavo’s pricing policy.
You can view current rates for the Lending Program directly in your Bitvavo account or on the Earn page.
Which assets are Lending-Enabled Assets?
Loading Lending-Enabled assets...
FAQ
Lending services are offered by Bitvavo Custody B.V., which is not licensed under MiCA. Any conflicts of interest are managed in line with MiCA requirements. For more details, please read our Conflict of Interest Disclosure. Additionally, because Lending services fall outside the scope of MiCA regulation, certain safeguards may not apply. Please ensure you understand the associated risks by reviewing our Risk Disclosure and User Agreement.
Why do I need to opt in for Lending before buying some assets?
By enabling Lending, you allow Bitvavo to lend your assets to professional parties when there's a temporary mismatch between supply and demand. This helps support trading activity, provides more liquidity and better pricing, and earns you rewards in return.
What happens after I opt in to Global Lending?
Once you’ve opted in to Global Lending, you will automatically start earning rewards on all assets that are eligible for Lending Rewards. You will also be able to buy any Lending-Enabled Asset.
When do I get my rewards credited to my account?
Rewards are calculated daily and paid out weekly, every Monday before 23:59, in the form of digital assets.
How are rewards calculated?
Rewards are based on:
- The current reward rate for the asset (which may change over time).
- The lowest amount of the asset you held in your wallet each day (including assets in open orders).
You stop earning rewards once you sell or withdraw the asset.
Why am I not receiving Lending rewards?
To receive rewards for an asset, the balance of that asset needs to be at least €1.00. If the balance is lower than that at the time that rewards are calculated, no rewards will be generated for that asset.
Additionally, the reward needs to exceed the minimum denomination of that asset. For example: Bitcoin rewards are paid in Sats (1 Bitcoin = 100 million Sats). You need to earn at least 1 Sat per day (365 Sats per year) to receive a payout. Therefore, at a reward rate of 0.01%, you need to hold at least 0.0365 BTC to qualify.
Are there any minimum reward thresholds for payouts?
The value of the asset you hold must be above €1.00. If the value of the asset falls below €1.00 at the time rewards are calculated, you will not be eligible to receive rewards.
What rewards will I receive when assets are eligible for both Staking and Lending rewards?
Bitvavo pays rewards for the highest defined rate if both Staking and Lending are enabled for the same asset.
How much can I receive in Lending rewards?
Reward rates are calculated daily and vary per asset. You can view the current rates in your Bitvavo account or on the Bitvavo Earn page.
Am I allowed to trade and withdraw my Lending assets as usual?
Yes, you can still sell or withdraw your assets as usual.
Can the Lending reward rates change?
Yes. Lending rates are influenced by supply and demand and may change over time. Updates are made at Bitvavo’s discretion and can apply even after you’ve opted in. Keep an eye on the Bitvavo blog and our Earn page to stay up to date with the most recent reward rates.
Are there any tax implications for Lending rewards?
The interest earned from lending your digital assets may be subject to taxation. The specific tax implications vary depending on your jurisdiction and the applicable tax laws. Interest income is typically considered taxable income, and you may be required to report and pay taxes on the interest earned. It is recommended to consult with a tax professional or refer to tax authorities to understand the tax obligations associated with lending activities in your jurisdiction.
Are there any restrictions on participating in Lending at Bitvavo?
Certain limitations or restrictions may apply to Bitvavo Lending participation. This may include restrictions based on where you are residing.
Each asset in the Lending Program has a maximum limit for how much it can be lent out. If that limit is almost reached, Bitvavo may temporarily block the option to opt out. This only affects users whose holdings would push the asset over the limit if they were to leave the program.
What are the risks involved with the Lending service?
When you opt in to the Lending service, you allow Bitvavo Custody BV to lend out eligible digital assets to professional parties that support liquidity on the Bitvavo platform. These parties use the assets to provide liquidity on the Bitvavo trading platform, helping ensure smooth and competitive trading for everyone. These assets may also be lent to other users for margin trading purposes or otherwise used in line with the User Agreement.
Bitvavo Custody BV takes several risk management measures to safeguard your assets. However, as with any lending service, some risk remains. We strive to make Lending as safe and transparent as possible, but we recommend reviewing the Risk Disclosure to decide if Lending suits you.
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