Borrowing and lending in DeFi

There has been growing interest in the search for way to earn a better return on capital and, while interest rates have risen, often the returns offered by bank deposits are paltry. Meanwhile, there are always those who need to borrow capital and, by wishing to do so, therefore pay the lowest interest possible. The practice of lending and borrowing money has existed for centuries; indeed, money lending can be traced to about 3000 BC in regions such as ancient Mesopotamia - home for the Sumerians, Babylonians, Assyrians, and Persians, using food to pay for what they borrowed. Today, the concept is simple: lenders give an amount of money to borrowers in exchange for a regular interest rate. A bank or other financial institution, (or sometimes a third party such as a peer-to-peer lending platform), is typically involved in these transactions. Decentralised finance (DeFi) platforms powered by blockchain technology offer solutions for depositors and borrowers and typically on a Peer2Peer a…