What Are DeFi Lending Platforms?

Decentralized finance (DeFi) lending platforms are decentralized applications (dApps) built on blockchain technology that enable users to borrow and lend cryptocurrency. These platforms use smart contracts to automate the lending process, eliminating the need for intermediaries such as banks. Here's an example of how a DeFi lending platform might work: Alice wants to borrow 100 ETH, so she goes to a DeFi lending platform and posts a request for a loan. Bob, who has 100 ETH to lend, sees Alice's…

What Are Overcollateralized DeFi Loans

Overcollateralized loans in the context of DeFi are loans where the borrower must provide collateral in an amount greater than the value of the loan itself. This collateral can be in the form of cryptocurrency assets such as Ethereum, Binance Coin, or other ERC-20 tokens or BNB BEP20 Tokens. For example, Alice wants to borrow $10,000 worth of Ethereum (ETH). However, she has $15,000 worth of ETH that she will put up as collateral. Alice can then use a DeFi platform…

DeFi Lending and Borrowing Explained

Decentralized Finance (DeFi) Lending and Borrowing refers to the use of blockchain technology to enable peer-to-peer lending and borrowing of assets without the need for intermediaries such as banks. In DeFi lending, individuals can lend their assets (such as cryptocurrencies) to others in exchange for interest. These loans are typically facilitated by smart contracts on a blockchain, which automatically manages the loan terms, including the interest rate and the loan duration. In DeFi borrowing, individuals can borrow assets from others,…