Lending Protocol
Also called: DeFi lending, Aave, Compound, money market protocol
A lending protocol lets users deposit assets to earn interest and borrow against collateral, with rates set algorithmically by utilisation. There is no credit assessment because there is no identity — which is why every loan must be overcollateralised, and why DeFi lending cannot yet do the thing that makes banking economically useful: lend to people who don't already have the money.