What is DeFi lending and borrowing? Complete Overview for 2026

Introduction to DeFi lending and borrowing

DeFi lending and borrowing represents one of the most innovative aspects of blockchain technology. It aims to recreate traditional financial services in a decentralized way.

For newcomers, DeFi lending and borrowing can seem overwhelming, but the core concepts are straightforward once you understand the basics.

How DeFi lending and borrowing Works

At its core, DeFi lending and borrowing relies on smart contracts — self-executing code on the blockchain that eliminates the need for intermediaries.

Understanding the mechanics of DeFi lending and borrowing helps you make informed decisions and avoid common pitfalls.

Getting Started with DeFi lending and borrowing

To begin exploring DeFi lending and borrowing, you will need a compatible wallet like MetaMask and some cryptocurrency for gas fees.

Start with small amounts as you learn how DeFi lending and borrowing works before committing larger sums.