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Just as in the conventional banking system, people earn interest or profit by depositing money in a bank and taking out loans against specific collateral when needed, a similar automated and decentralized system has been developed in the world of cryptocurrency. This crypto lending and borrowing system is one of the main pillars of decentralized finance (DeFi). This entire process is managed completely through blockchain smart contracts without any banks, paper documents, credit scores, or human-made intermediaries, making it much more dynamic and independent than regular banking. The lending part of this system is basically a great source of passive income for long-term investors. If an investor has a large amount of cryptocurrency or stablecoin lying idle in his wallet, he can deposit it in a lending protocol like Aave or Compound instead of selling it in the market. Due to this deposit, he becomes a digital lender and the network lends to other users from the liquidity he provides. In recognition of this service, lenders receive interest or dividends at a fixed annual rate, which is deposited directly into their wallets. On the other hand, the borrowing part mainly helps to meet the immediate need for funds. Let's say a user needs some dollars for an urgent need, but he does not want to sell his Ether or Bitcoin holdings in the current market, because their prices may increase further in the future. In such a situation, he can take a loan by pledging his crypto assets through this system. However, the main condition for taking a loan in the crypto market is over-collateralization. That is, if you want to take a stablecoin loan worth $ 1,000, you need to lock it in Bitcoin or any other cryptocurrency protocol worth one and a half or twice that amount. After repaying the loan, the user gets his original pledged asset back intact. Anyone from anywhere in the world can enjoy this loan facility in just a few clicks without filling out any paper forms. However, there is a major risk in this system, which is called liquidation. If the price of the pledged asset suddenly drops below a certain limit due to extreme fluctuations in the crypto market, the smart contract automatically sells the pledged asset in the market to recover the loan to avoid its own loss. If the right protocol can be selected keeping in mind this risk and the technical flaws of the smart contract, crypto lending and borrowing offers an unimaginable economic freedom to increase the utility of digital assets. Today's discussion concludes here. I hope you've found it interesting. Please share your thoughts on today's topic. Prayers for everyone. May everyone be well. Amen.