#OnChainLendingSurge

⚠️Key Features of On-Chain Lending:

1. Decentralized Platforms:

Platforms like Aave, Compound, and MakerDAO enable users to lend or borrow cryptocurrency assets.

They operate without central authorities and are accessible globally.

2. Smart Contracts:

Smart contracts manage transactions, ensuring transparency and trust.

These contracts automatically enforce loan terms, reducing the need for third parties.

3. Collateralization:

Borrowers typically provide cryptocurrency as collateral to secure loans.

Over-collateralization is common to manage risks (e.g., borrowing $100 may require $150 worth of collateral).

4. Interest Rates:

Determined algorithmically based on supply and demand.

Rates can fluctuate in real-time depending on the liquidity of the asset pool.

5. Permissionless:

Anyone with a crypto wallet can participate as a lender or borrower without needing credit checks or approvals.

6. Transparency:

All transactions are recorded on the blockchain, offering full visibility.