DeFi Lending & Borrowing

Point Ethereum’s unstoppable code and what you know about interest at the oldest business in finance — lending at one rate, borrowing at another — and you get a money market with no bank in the middle: smart contracts where idle assets earn yield and locked collateral unlocks cash, with no loan officer, no application, and nobody who knows your name.

This topic opens that machine all the way up. You’ll learn:

• What DeFi lending is — pooled liquidity instead of a banker, algorithmic rates, and the surprise that every loan is over-collateralized.
• Collateral, loan-to-value & borrowing power — the borrower’s-eye view of how much cash your locked assets can unlock.
• The health factor — the single number that measures how close you are to trouble.
• Liquidation — the automated repo-man that keeps lenders whole when your position slips.
• The interest-rate curve — how utilization gets turned into a price.
• Receipt tokens — the aTokens and cTokens that quietly compound in your wallet.
• Oracle failures, bad debt & protocol risk — the things that actually break.

By the end, Aave, Compound and MakerDAO/Sky stop being logos and start being mechanisms you can reason about — and, if you choose, use without getting liquidated.