Let’s talk about decentralized lending.
Mainstream on-chain lending is overcollateralized: the value you can borrow is less than the value of your collateral.
Honestly, I only understood this later: borrowing rates are variable, and when pool utilization is high, rates can rise sharply. If you’re borrowing long term, you need to factor in this cost.
$AAVE is the governance token of the decentralized lending protocol Aave. Currently 151.91.
Understanding how it works can help you make more informed decisions; it’s not a way to predict whether prices will rise or fall.
#AAVE
Mainstream on-chain lending is overcollateralized: the value you can borrow is less than the value of your collateral.
Honestly, I only understood this later: borrowing rates are variable, and when pool utilization is high, rates can rise sharply. If you’re borrowing long term, you need to factor in this cost.
$AAVE is the governance token of the decentralized lending protocol Aave. Currently 151.91.
Understanding how it works can help you make more informed decisions; it’s not a way to predict whether prices will rise or fall.
#AAVE