When working with DeFi lending, a system that lets users borrow or lend crypto assets without a traditional bank. Also known as decentralized finance lending, it relies on blockchain transparency and algorithmic risk assessment.
One key piece of the puzzle is Liquidity mining, the process of providing assets to a protocol in exchange for reward tokens. Collateral tokens, digital assets locked up to secure a loan are the other essential component. In simple terms, DeFi lending encompasses liquidity mining because lenders earn extra yields while supplying capital, and it requires collateral tokens to protect lenders from borrower default. This combination creates a self‑balancing market where supply and demand meet automatically.
Behind the scenes, Smart contracts, self‑executing code that enforces loan terms on the blockchain make the whole system possible. They enable borrowers to get instant credit once they lock collateral, and they automatically trigger liquidation if the collateral value falls too low. Another related activity is Yield farming, staking or providing liquidity to earn multiple layers of reward tokens. Yield farming complements DeFi lending by allowing users to stack returns on top of the interest earned from loans.
These entities interact in predictable ways: smart contracts enable DeFi lending, liquidity mining adds incentive layers, collateral tokens secure the loans, and yield farming boosts overall profitability. Understanding how each piece fits helps you assess risk, choose the right platforms, and design strategies that match your risk tolerance. Whether you’re new to crypto or an experienced trader, grasping these connections is the first step toward smarter borrowing and lending decisions.
Below you’ll find a curated list of articles that dive deeper into each of these topics, from beginner guides to advanced tactics. Browse through the collection to see how real‑world projects apply DeFi lending, learn about tokenomics, and pick up actionable tips you can start using right away.
A comprehensive Crema Finance review covering its DeFi lending, swap features, security history, tokenomics, multi‑chain support, and how it stacks up against Aave and Compound.
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