The crypto lending landscape has evolved, with platforms now offering 0% Annual Percentage Rate (APR) loans, but these are tied to specific and often strict loan structures, primarily governed by Loan-to-Value (LTV) ratios. Understanding these mechanics is crucial for borrowers using assets like BTC, ETH, or SOL as collateral.
Clapp's credit-line model is highlighted as a leading example. It offers a revolving credit line where users deposit crypto—including BTC, ETH, SOL, or up to 19 supported assets—and receive a credit limit. The key feature is a 0% APR on unused credit when the LTV is maintained below 20%. Interest is charged only on the amount withdrawn, aligning costs directly with usage. The platform supports this with real-time LTV monitoring, margin notifications, flexible repayment without penalties, and multi-asset collateral pools.
The article emphasizes that LTV is the central driver of cost and liquidation risk, far more than the headline APR. A conservative LTV (e.g., 10%) supports safer borrowing, lower rates, and reduced risk. Platforms structure their offerings around this principle.
Other major lenders were reviewed for comparison. Nexo uses a credit-line model with tiered rates based on loyalty levels, but 0% APR does not apply to borrowed funds. Binance Loans offers fixed-term loans with immediate interest accrual and no 0% APR structure. MakerDAO's DAI vaults use collateral-backed debt positions with stability fees, which can approach low levels under certain conditions but are not straightforward 0% APR offers.
Repayment terms are another critical, often overlooked factor. Fixed-term loans can be rigid, while flexible models like Clapp's allow borrowers to adjust exposure in response to market volatility, transforming borrowing into an adjustable liquidity tool.
Concurrently, the article notes a shift in user behavior following a major market stress event in early February, where BTC long liquidations exceeded $1.3 billion in a single day. This has increased the appeal of defensive allocations like crypto savings products. Platforms like Clapp offer Flexible Savings (0 lock-up, daily payouts) and Fixed Savings (guaranteed rates for 1-12 months) as non-directional, yield-bearing accounts with no liquidation risk. These products are gaining relevance as capital flows out of leveraged positions and into stability during high-volatility cycles.
