What is lending in cryptocurrencies and how does it work?

Lending in cryptocurrencies is the process of providing loans using cryptocurrency. Users who possess digital assets can lend them to other participants on the platform, earning interest for the use of their funds. Unlike traditional banks, crypto platforms offer higher rates and also allow borrowers to receive loans without the need to provide physical assets. To protect both parties, smart contracts are used, which automatically regulate the terms of the deal, minimizing risks.