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A DeFi Deep Dive - What Is DeFi Lending?

Written By Ivan on Tech

Jul 27, 2020

What is DeFi Lending?

The DeFi lending space plays the same role as any traditional bank giving loans to a user or business. But as with any other blockchain application, DeFi lending has much more to offer than its conventional peers.

The DeFi crypto lending platforms offer crypto loans to anyone in a trustless manner, i.e., without intermediaries. Any user can enlist the crypto coins they own in the DeFi lending platforms for lending purposes. A borrower will directly take a loan from the platform, which can also be called DeFi P2P lending. The lending protocol enables the lender to earn interests.

Out of all the other DApps available in the decentralized finance space, the DeFi lending growth rate is highest, making it the most significant contributor to locking crypto assets. According to crypto research company Messari, the DeFi lending space is the top-performing section in terms of ROI (return of investment), followed by decentralized exchanges (DEX) and DeFi payments.

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