With high interest rates for crypto loans, I'm currently thinking of lending out my cryptocurrency on a crypto lending platform like Celsius Network. However, I'm not too sure about the implications
The main implication is the high interest rates mean that the risk is high.
Anyways, I want to know if there is anything more to crypto lending other than putting in my tokens and collecting taxable interest.
Has Celsius Network explained you how do they plan on paying you, say, 1.10 BTC next year for each BTC you give them now? Where will that 0.10 BTC come from (*)? Unlike rabbits, it is not that you put some of them together and then magically more of them appear. They must do something.
Maybe they plan to lend to business who can invest it and to produce extra value to pay for it. But then they are working as a bank, why should they give extra interest? Also, it is very risky for everyone, maybe the business they lend to can repay back the money with %20 more, but, will it be enough to buy your BTC back then?
Maybe they plan to sell your BTC while the price is high and buy back to return yours when the price is low. But they are taking a risk that maybe you are not comfortable with, if they are wrong and the price does not get lower it will be you the one who loses the BTC ("sorry, we explained to you at clause 412.f at page 212 of the contract"). Or maybe it is not in the contract and they promise you "100% guarantee" that you will get your BTC back, and just declare bankruptcy.
Maybe it is just a Ponzi scheme. They will tell everybody that they have so much money, hoping that people won't want it back because everything goes so well.
And of course, apart of the above there is the issue that if the price of your crypto goes down you will not be able to sell it earyly.
(*) Apart from the extra BTC needed to pay for their operation expenses and profits.