About Lending Platforms Cryptocurrency loans can be borrowed from both centralized services such as BlockFi and decentralized credit protocols, the largest of which are Aave and Compound. Since this article is about DeFi, we will talk about the second type of platforms. A decentralized loan protocol (lending protocol) is a service that provides the ability to take cryptocurrency loans without the need to trust an intermediary, provide their funds for a loan and receive interest for it. Credits and loans with DeFi DeFi lending allows anyone who wishes to become a lender or borrower of funds completely decentralized and without the need to prove their identity and income. The lender is the lender of the loan. The borrower is the one who takes the credit. Users who want to become lenders, deliver their tokens to the platform and begin to receive interest on the deposit. Provided tokens are sent to a smart contract and become available for borrowing by other users. In exchange for granted tokens, the smart contract issues other tokens that display the granted tokens + percent. These tokens are called cTokens in Compound and aTokens in Aave. We will delve into their mechanics later in this article. Credit facilities The amount that can be borrowed depends on two main factors. How much money in total is available for borrowing on the platform.
This is usually not a problem with enough active creditors, unless someone is trying to borrow a really large number of tokens What is the collateral factor of the tokens supplied.
The collateral factor (collateral factor) is the percentage of the collateral value on which a loan can be made.