DeFi lending and borrowing are changing traditional finance by allowing users to control assets within blockchain ecosystems without intermediaries.
What is DeFi Lending & Borrowing?
DeFi lending allows users to lend their assets to others in exchange for interest, while borrowing enables users to take loans against their crypto holdings as collateral. Both are non-custodial, meaning users retain control over their assets.
How Does DeFi Lending Work?
Users deposit crypto assets into a lending platform, where they earn interest based on the demand for the assets they’ve provided. Platforms like Aave, Compound, and MakerDAO offer decentralized lending pools for various tokens.
Popular DeFi Lending & Borrowing Platforms
Aave and Compound are among the largest DeFi protocols for lending and borrowing, offering users a broad range of assets and competitive rates. MakerDAO allows users to borrow DAI stablecoins by locking up collateral such as ETH or BAT.
DeFi lending and borrowing are part of the larger movement towards decentralized finance, offering greater financial freedom and accessibility while reducing reliance on traditional banking systems.
