Lending and Borrowing Protocols

Welcome to DeFi Lending!

Who are the Players?

Lending Pools: The Core

Dynamic Interest Rates

Securing Your Loan with Collateral

When Collateral Isn't Enough

Inside the Lending Protocol

Code Example: Deposit Logic

/* SPDX-License-Identifier: MIT */
pragma solidity ^0.8.0;

interface IERC20 {
    function transferFrom(address sender, address recipient, uint256 amount) external returns (bool);
    function transfer(address recipient, uint256 amount) external returns (bool);
    function balanceOf(address account) external view returns (uint256);
}

contract SimpleLendingPool {
    // Mapping to track deposits: asset address => user address => amount
    mapping(address => mapping(address => uint256)) public deposits;

    // Function to deposit collateral
    function deposit(address asset, uint256 amount) public {
        require(amount > 0, "Deposit amount must be > 0");
        // Transfer tokens from sender to this contract
        bool success = IERC20(asset).transferFrom(msg.sender, address(this), amount);
        require(success, "Token transfer failed");
        
        deposits[asset][msg.sender] += amount;
        // In a real protocol, you'd mint interest-bearing tokens here
    }

    // Placeholder for other functions like borrow, repay, withdraw
    // ...
}

Code Example: Borrow Logic

/* SPDX-License-Identifier: MIT */
pragma solidity ^0.8.0;

interface IERC20 {
    function transferFrom(address sender, address recipient, uint256 amount) external returns (bool);
    function transfer(address recipient, uint256 amount) external returns (bool);
    function balanceOf(address account) external view returns (uint256);
}

contract SimpleLendingPool {
    mapping(address => mapping(address => uint256)) public deposits;
    mapping(address => mapping(address => uint256)) public borrows;

    // Simplified price oracle for demonstration
    function getAssetPrice(address asset) internal pure returns (uint256) {
        // Assume all assets have a price of 1 ether for simplicity (1e18 wei)
        // In a real system, this would fetch actual prices from a robust oracle.
        return 1 ether; 
    }

    function deposit(address asset, uint256 amount) public {
        require(amount > 0, "Deposit amount must be > 0");
        IERC20(asset).transferFrom(msg.sender, address(this), amount);
        deposits[asset][msg.sender] += amount;
    }

    // Function to borrow assets against collateral
    function borrow(address assetToBorrow, uint256 amount, address collateralAsset) public {
        require(amount > 0, "Borrow amount must be > 0");
        require(deposits[collateralAsset][msg.sender] > 0, "No collateral deposited");

        // Calculate collateral value and borrow value (simplified LTV of 50% for demo)
        uint256 userCollateralValue = deposits[collateralAsset][msg.sender] * getAssetPrice(collateralAsset);
        uint256 borrowValue = amount * getAssetPrice(assetToBorrow);
        require(borrowValue <= userCollateralValue / 2, "Insufficient collateral for loan");

        // Transfer tokens from this contract to the borrower
        bool success = IERC20(assetToBorrow).transfer(msg.sender, amount);
        require(success, "Token transfer failed");

        borrows[assetToBorrow][msg.sender] += amount;
        // A real contract would also track interest and repayment schedules
    }
    // ... (repay, withdraw functions would also be here in a full contract)
}

Quick Check: Lending Concepts

Key Takeaways