Definition ∞ Credit products are financial instruments that allow individuals or entities to borrow funds, typically with an obligation to repay the principal and interest. In the digital asset domain, these products extend beyond traditional bank loans to include decentralized lending protocols where users can borrow cryptocurrency by providing other digital assets as collateral. These arrangements often feature algorithmic interest rates determined by supply and demand within the protocol. They provide liquidity and leverage opportunities within the crypto economy, operating without traditional intermediaries.
Context ∞ The availability and structure of credit products in decentralized finance remain a significant area of innovation and risk assessment, particularly concerning undercollateralized lending and flash loans. Discussions frequently address the sustainability of lending yields, the efficiency of liquidation mechanisms, and the potential for systemic risk in interconnected protocols. Future advancements aim to enhance the security, capital efficiency, and regulatory clarity of digital asset credit markets, fostering more robust and accessible borrowing and lending opportunities.
Blockchain Knowledge
Cryptocurrency Foundation
Cryptospace Newsfeed
