What do we call a cryptocurrency loan service implemented on a blockchain?

Question: What do we call a cryptocurrency loan service implemented on a blockchain?

A cryptocurrency loan service implemented on a blockchain is a type of decentralized finance (DeFi) application that allows users to borrow and lend digital assets without intermediaries. DeFi loan services use smart contracts to automate the lending process and enforce the terms of the loan, such as interest rate, collateral, and repayment schedule. Users can benefit from DeFi loan services by accessing liquidity, earning passive income, or leveraging their crypto holdings.

Some examples of DeFi loan services are Aave, Compound, and MakerDAO. These platforms have different features and advantages, such as variable or fixed interest rates, flash loans, or overcollateralized or undercollateralized loans. Users can choose the best option for their needs and preferences, as well as diversify their risk by using multiple platforms.

DeFi loan services are part of the broader DeFi ecosystem, which aims to create an open, permissionless, and transparent financial system that operates on a blockchain. DeFi applications cover various financial functions, such as lending, borrowing, trading, investing, insurance, and more. DeFi applications are interoperable and composable, meaning that they can be integrated and combined with each other to create new products and services.

DeFi loan services are an innovative and exciting development in the crypto space that offer new opportunities and challenges for users and developers. They have the potential to democratize access to finance, lower costs, increase efficiency, and foster innovation. However, they also entail risks, such as smart contract bugs, hacks, market volatility, regulatory uncertainty, and user error. Therefore, users should do their own research, understand the risks involved, and exercise caution when using DeFi loan services.