DeFi lending platforms allow users to lend or borrow digital assets without relying on traditional banks. Using smart contracts, these platforms automate lending terms, collateralization, and interest rates, ensuring transparent and secure transactions. Lenders earn interest by providing liquidity, while borrowers deposit crypto as collateral to access loans. Notable platforms like Aave, Compound, and MakerDAO offer decentralized and permissionless lending markets. These systems promote financial inclusivity, reduce entry barriers, and enable users worldwide to access financial services anytime, without intermediaries.
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