Crypto lending is similar to lending in traditional financial markets. It means that the lender lends funds to the borrower, and the borrower The assumption of a debt, usually a liability to pay interest on the debt until all principal and interest on the debt are paid off. The main difference between crypto lending and traditional lending is that the subject matter in crypto lending is a cryptoasset.

There are two main types of crypto lending platforms: decentralized crypto lending protocols or centralized crypto lending platforms. Both are platforms that connect lenders and borrowers. Crypto loans typically require borrowers to deposit crypto asset collateral to obtain the loan.

A classic example of a decentralized crypto lending protocol is Aave, a permissionless decentralized lending protocol. Users can deposit crypto assets into the Aave protocol, provide liquidity to other borrowers and earn interest income. Depositors can also choose to borrow other cryptoassets using their deposited cryptoassets as collateral.

What is a decentralized lending protocol? Why is there no permission required? Please refer to the "What is Decentralized Lending" and "What is Aave" chapters.

Centralized crypto lending refers to an entity company that provides crypto asset lending services. A typical example is the Binance Earn and Crypto Loans services offered by the Binance exchange.

Crypto lending helps crypto asset holders unlock liquidity in their holdings so they can obtain liquidity without having to sell their assets.