An on-chain money market is a decentralized financial protocol operating entirely on a blockchain, facilitating permissionless lending and borrowing of digital assets. These markets typically use smart contracts to automate interest rate calculations, collateral management, and liquidation processes. They allow participants to access capital or earn yield directly, without the need for traditional intermediaries. This architecture promotes transparency and censorship resistance.
Context
On-chain money markets are foundational to the decentralized finance ecosystem, enabling capital efficiency and providing liquidity for a wide array of digital assets. The stability and security of these protocols are consistently under review, as their performance significantly influences the broader decentralized finance landscape and attracts increasing regulatory attention. Their growth continues to reshape traditional financial paradigms.
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