LongHash Analysis: The most profitable area in the cryptocurrency industry is lending.

In the world of cryptocurrency, people often focus on two main types of tokens: smart contract tokens (such as Ethereum) and currency tokens (such as Bitcoin). However, when looking at the median return on investment (ROI) of cryptocurrencies over the past 90 days and the past year, the standout winner is the lending sector.

The chart above shows the median ROI of different sectors of cryptocurrencies in the past 90 days and the past year. The classification and analysis of all 349 coins were conducted by Messari based on their methodology. We created the ROI median chart based on their data (using median instead of mean to present the overall trends of each sector more objectively due to the presence of some extreme values). To enhance readability, we excluded sectors with 5 or fewer projects.

Our research revealed that the lending sector, a small-scale sector with only 8 projects, emerged as the most profitable sector with 5 of its coins showing positive median ROI in the past 90 days and past year (measured in USD). The 5 coins are Maker, Nexo, Ripio Credit Network, Aave, and Cred. Overall, the lending sector's cryptocurrencies had a median ROI of over 75% in the past year and over 15% in the past 90 days.

Despite the small sample size, it is evident that the lending sector is one of the hottest sectors in cryptocurrencies, both in the short and long term.

Each project has its unique selling points. Generally, cryptocurrency lending projects tend to offer users decentralized investment and loan services, allowing users to invest their coins in various projects with different risk levels and expected returns. This is made possible by the support of blockchain's immutable and trustless characteristics.

Furthermore, tokens related to exchanges (classified as "centralized exchanges" on the chart) also exhibited a considerable median annual return on investment, mainly due to the outstanding performance of platform tokens like Binance BNB last year. However, the returns of these tokens have decreased recently. On the other hand, decentralized exchanges performed poorly last year, with an annual ROI dropping below -40% and a 90-day ROI nearing -20%.

It is worth noting that while the 90-day data shows more significant differentiation, looking at the median annual ROI, no sector exceeded Bitcoin's 140% ROI during the same period, and only the lending and centralized exchange sectors surpassed Ethereum's 40% ROI.

In other words, despite the popularity of the lending sector, the competing coins have not been able to catch up with Bitcoin.

This article is from our partner LONGHASH

Join Telegram now for the most accurate blockchain news and cryptocurrency updates!