Why people take DeFi credit, why they use Aave for this?

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The discussion revolved around the use of DeFi lending protocols, which are currently primarily used for profit-making, but theoretically could be used for real-world applications like starting a business. Participants expressed optimism for the future of DeFi lending, hoping for a wider variety of loan types similar to traditional financial services.

The discussion kicked off with Defigeek raising questions about the functionality and utilization of DeFi lending protocols. They compared the lending process in traditional financial services with that of DeFi, noting that while traditional services offer a variety of loans, DeFi seems to be primarily used for profit-making 1,2.

AAVE-addict provided a detailed response, explaining that lending protocols theoretically allow users to re-inject their funds into the real economy. They illustrated this with an example of a user depositing their ETH to Aave, borrowing dollars, and starting a business without selling their ETH. However, they also acknowledged that in reality, most users tend to use the borrowed coins in DeFi for activities such as leveraging their collateral or providing liquidity on a stable pool to earn rewards3.

Defigeek responded positively to this explanation and expressed optimism about the future of DeFi lending, expressing a desire to see a wider variety of loans similar to those in traditional financial services4. Marcogg further enriched the discussion by adding other real-world use cases for DeFi lending protocols, including leveraging, shorting, and tax postponement5.

In conclusion, while DeFi lending protocols are primarily used for profit-making, there is potential for their use in real-world applications. The community expressed hope for the future of DeFi lending, with suggestions for a broader range of loan types akin to traditional financial services.

Posted a year ago

Last reply a year ago

Summary updated 2 months ago

Last updated 09/12 13:53