DeFi lending: intermediation without information?

Lending platforms – a key element of decentralised finance (DeFi) – stand at the centre of the recent crypto turmoil. Total value locked in DeFi lending protocols peaked at $50 billion in early 2022, up from nearly zero at end-2020. Lenders are attracted by high interest rates that often far exceed those on bank deposits or money market funds (right-hand panel). Borrowers, in turn, use DeFi lending to gain leveraged exposure to cryptoassets or adjust portfolios. However, the recent collapse of Anchor on the Terra blockchain and Celsius’ restrictions on withdrawals have shaken confidence and put a stop to the rapid ascent of crypto lending. …

Quelle / Link: DeFi lending: intermediation without information? 

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