How does a crypto loan work?

The lenders and borrowers are connected through a crypto lending platform that acts as a third party. Now, there is an entire step-by-step process involved in lending and borrowing between these three parties. Firstly, the borrower goes to a lending platform to request a crypto loan.

What is the role of borrowing and lending in the economy?

Borrowing and lending are backbones of any thriving economy. It is a pillar used by governments to control the prices and inflation. For instance, if a government wants to control inflation, they make it expensive to borrow money. Similarly, if they want to add fuel to the economy, interest rates are made cheaper.

How is crypto sizing up traditional finance?

Cryptocurrency is sizing up traditional finance on its legacy turf of lending and borrowing with competitive interest rates (currently as low as 0.44% for ethereum and 4.50% per year for bitcoin) as well as less cumbersome verification procedures.

What is borrowing and lending in DEFI?

However, in this post, we are going to talk about borrowing and lending in DeFi. Borrowing and lending are backbones of any thriving economy. It is a pillar used by governments to control the prices and inflation. For instance, if a government wants to control inflation, they make it expensive to borrow money.