Lending and Borrowing Protocols
Examine the smart contract architecture behind decentralized lending and borrowing platforms like Aave and Compound.
Welcome to DeFi Lending!
Decentralized Finance (DeFi) lending platforms allow users to lend out their crypto assets to earn interest, or borrow assets by providing collateral.
These platforms operate without traditional banks, using smart contracts to automate the entire process, making it transparent and accessible to anyone with an internet connection.
Who are the Players?
In a DeFi lending protocol, there are two main participants:
- Lenders: Users who deposit their cryptocurrencies into a smart contract to earn interest. They are providing liquidity.
- Borrowers: Users who want to take out a loan. They must provide collateral, usually more than the value of the loan (over-collateralization).
All lessons in this course
- AMMs and Liquidity Pools
- Lending and Borrowing Protocols
- Flash Loans and Arbitrage
- Yield Farming and Staking Rewards