The cryptocurrency world is on the verge of a new trend — on-chain lending. Does that sound like a revolution? Yes, but only until you realize that it’s a new name for an old game.
---
What is On-Chain Lending?
This is when you borrow money from a smart contract instead of a bank. Sound safe? Don't be too happy. Your credit "agent" is an algorithm that doesn't know what empathy is and will harshly liquidate your assets if the collateral gets a little "soaked" by a market drop.
In 2025, on-chain lending has become a must-have for crypto traders who want to live on the edge. You can put your BTC, ETH, or even NFTs as collateral. Yes, now your digital "monkey token" can provide you with real money if you believe in its value more than your grandmother in hryvnia.
---
Why has it become so popular?
1. Centralized banks look like dinosaurs.
You come to the bank and hear: "Fill out the form, wait a week." In DeFi, everything is simple: click-click, and you have money in your account. And then click - and your assets are liquidated. Speed, friends!
2. High profitability.
A deposit at 0.5% per annum? No, thank you. In DeFi, rates can reach up to 20%. However, they do not specify that this can end with a zero balance on the wallet.
3. People are not afraid of risk.
Crypto enthusiasts are the same people who bet money on snail races as children.
---
But what about the dark side?
On-chain lending looks great when things are going well. But when the market crashes, liquidations follow suit. And that’s where the drama begins:
Your ETH was "withdrawn" because the price dropped by 1%.
Smart contracts "cannot make mistakes." Your money is gone forever, and no bank will get it back.
And don't forget about hackers. Your collateral assets may end up not with the liquidator, but with some Vasya from the Darknet.
---
Is this really the future of finance?
On-chain loans look like a revolution, but with a touch of total risk. If you want to try it, be prepared for the fact that your assets could "disappear" faster than your payday.
Bottom line? On-chain lending is love at first sight, which can turn into heartbreak. But the crypto community is about those who are willing to take risks. Because those who don't take risks are stuck with a bank deposit at 1%.
Your move, DeFi enthusiasts!