1. What Is DeFi Lending?
Lending coins and earning interest through blockchain smart contracts, without a bank.
2. How It Works
- Depositors: Deposit coins in a protocol → receive interest.
- Borrowers: Provide collateral and borrow coins → pay interest.
- The entire process runs automatically through smart contracts.
3. Major Lending Protocols
Protocol | TVL | Supported chains | Features
Aave | $10B+ | Multiple chains | Flash loans, V3
Compound | $2B+ | Ethereum | Simplified V3
Morpho | $3B+ | Ethereum | P2P optimization
Venus | $1B+ | BNB Chain | Largest lender on BSC
Spark | $2B+ | Ethereum | Originated from MakerDAO
4. Lending Risks
⚠️ Precautions
• Smart-contract hacks — Code vulnerabilities can cause loss of funds.
• Liquidation risk — Falling collateral value can trigger automatic liquidation.
• Variable interest rates — Rates change frequently.
• Oracle failures — Price-feed errors can cause improper liquidations.
5. AI Trading vs. DeFi Interest
DeFi interest is commonly 1–10% per year. Automated AI trading seeks higher returns, but its risks differ. Using both together can also be a useful strategy.