What is DeFi?
DeFi is essentially an all-encompassing term for taking existing financial products like loans and porting them over to the blockchain. Using smart contracts, you can use existing cryptocurrencies to provide financial services. A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. Smart contracts permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority.
What are DeFi loans?
DeFi loans allow crypto users to lend their assets to others and earn interest on their loan. Crypto assets offer similar products as a traditional bank, but in a decentralized form. You can lend, borrow, margin trade, and much more.
How do DeFi loans work?
Some crypto valuations rise and fall. But any crypto sitting quietly in your wallet is not accruing interest for you. That’s where DeFi Loans come into play.
In the world of DeFi, any cryptocurrency user can become a lender. By loaning your crypto assets to others, you are able to generate interest on those assets. You can lend, borrow, trade, invest, etc. with DeFi.
How are loans made?
Using a smart contract, found on projects like Avalanche, users can pool their assets and distribute those assets to borrowers with the rules of the loan written into the contract. When a borrower wants to take out a loan, they do so by depositing via a smart contract an amount of currency that is at least of equal value to the amount they’d like to take out. When the borrower is done with the loan, they need to pay back their loan plus a small percentage to go to the lending pool and then they receive their collateral back.
Where does Vee Finance come in?
Vee Finance is a lending protocol built on Avalanche. With low gas fees and blazing network speed to support high volume transactions, Vee Finance allows crypto users to easily lend, borrow, trade, invest, and much more. The seamless integration of features that are unique to our platform will allow users to operate in a low-risk environment and help maximize your crypto gains.
