Introduction
In the finance world, lending and borrowing are crucial services, made easier by concepts like credit and collateralization. Historically, these methods have been vital for economic growth, letting people and businesses access money for projects they couldn't afford otherwise. But traditional lending often has barriers like strict rules, limited access based on location, and favoring the rich.
In DeFi, these barriers disappear, and there's no need for middlemen like banks, just like we've discussed in previous modules. Picture a world where anyone, no matter how much money they have or where they live, can get money by offering something valuable as security. Before, only a select few could access financial markets. Now, with DeFi lending services like Kamino, MarginFi, Maker, Aave, and Solend, everyone can use what they own to get involved in finance.
Key Terminologies