Money Markets
In DeFi (Decentralized Finance)
Plain English
Platforms where you can lend and borrow cryptocurrency. Lenders earn interest, borrowers pay interest. Interest rates change based on supply and demand. Popular ones on Solana include Solend and MarginFi. Think of them as banks without the banks.
Technical
Decentralized protocols enabling permissionless lending and borrowing through algorithmic interest rate models. Users deposit assets into shared pools earning variable interest, while borrowers can take collateralized loans. Interest rates adjust dynamically based on utilization ratios. Risk management includes liquidation mechanisms, collateralization requirements, and reserve factors.