Insightful Principles

EP 86: What is DeFi Lending?


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Decentralized finance (DeFi) lending is one of the growing aspects of blockchain and the cryptocurrency ecosystem. As of March 25th 2022, there is $214.92 billion total value locked in DeFi protocols. That's a mix between lending, borrowing, and staking. So this industry provides many opportunities for investors.
 I explained the differences between lending and borrowing when using your crypto. I provided insight on how interest works when lending out your crypto to other people. As well as the borrowing aspects where you can utilize your crypto as collateral and take out a loan.
This is a complete guide to crypto loans and understanding how liquidity pools work. I provided some examples of how a crypto loans work with MakerDAO. I mention why someone would want to borrow against their asset instead of selling it.
Other concepts mention is dealing with market volatility with crypto loans and how to avoid being over leverage. Lastly, I provided some resources on research around DeFi and doing your due diligence with different protocols.
DeFi Lending Resources:
https://defillama.com/
https://defiyield.app/
https://defirate.com/
https://cointelegraph.com/defi-101/how-to-get-started-in-defi-a-guide-on-the-first-steps-in-decentralized-finance
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Insightful PrinciplesBy Kevin N Jenkins

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