Definition ∞ Lending applications are software platforms that facilitate the borrowing and lending of assets, often without traditional intermediaries. These applications, particularly in decentralized finance (DeFi), use smart contracts to automate loan agreements, collateral management, and interest rate calculations. They allow users to earn interest by supplying liquidity or obtain loans by providing collateral. Such systems aim to create more efficient and accessible credit markets.
Context ∞ Lending applications are a fundamental component of the DeFi ecosystem, enabling users to leverage their digital assets for various financial activities. News often covers the growth, security audits, and regulatory challenges associated with these platforms. Their ongoing development impacts the overall utility and expansion of decentralized financial services.
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