Credit Market

Definition ∞ A Credit Market is a financial system where capital is loaned and borrowed, typically with an agreement for repayment plus interest. In the context of digital assets, this refers to decentralized lending and borrowing protocols operating on blockchain networks. These platforms allow users to access capital or earn returns on their holdings. It forms a vital component of the broader digital economy.
Context ∞ The expansion of decentralized credit markets is a key area of interest in crypto news, as they offer alternatives to traditional financial institutions. Debates often focus on the risks associated with over-collateralization requirements, smart contract vulnerabilities, and regulatory oversight. Their development continues to shape the landscape of digital asset financing and investment opportunities.