How does DeFi lending compare with traditional lending?

Asked 2 years ago

I am used to traditional lending where the ordinary man deposits money into the bank to earn interest, and the bank in turn lends the funds to borrowers. But how does DeFi lending compare to this? Is it a step UP or a step AWAY from the traditional lending methods?

Blaine Mccarty

Saturday, June 25, 2022

The technology behind DeFi lending is blockchain; DeFi leverages its unique features to emerge a step UP over the traditional lending methods.

First, DeFi lending guarantees total transparency with easier access to funds from transactions without an intermediary, unlike traditional lending methods' opaque and centralized nature.

Secondly, it has the easiest lending and borrowing process – users only need to access a DeFi platform, connect their wallets and interact with smart contracts.

Thirdly, DeFi guarantees a censorship-free environment, implying there's no bias in service delivery while ensuring immutability.

Lastly, DeFi lending is beneficial to lenders and borrowers alike. It provides margin trading alternatives and lets long-term crypto investors lend tokens and enjoy better interest rates than traditional lending methods.

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