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decentralized finance decentralized money markets defi makerdao

Decentralized Money Markets and MakerDAO

Written By Ivan on Tech

Jun 20, 2020

Decentralized Finance (DeFi) is all about creating an open-source, permissionless, transparent, financial ecosystem available to anyone with an internet connection. 

DeFi offers a set of products and services similar to that of the conventional financial world except they’re built on a blockchain—notably Ethereum (ETH). And one of the most popular and fastest-growing sectors of DeFi is the money markets. 

What are Decentralized Money Markets?

Traditional money markets exist for the borrowing and lending of assets—likewise, for decentralized money markets. However, the assets involved can be cryptocurrencies and it is smart contracts (not middlemen bankers) that dispense the interest payments and enforce the terms of the loan. No middleman means higher returns for the lenders.

Another big difference is that when you participate in DeFi you can make money off interest payments—unlike the current financial system that’s been operating on zero or...

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