DeFi is composed of several key components, including:
- Lending platforms: These platforms allow users to lend and borrow cryptocurrencies, often with interest rates and collateral requirements.
- Decentralized exchanges (DEXs): DEXs allow users to trade cryptocurrencies in a decentralized manner, without the need for intermediaries.
- Stablecoins: stablecoins are cryptocurrencies that are pegged to the value of a traditional currency, such as the US Dollar. They provide a stable store of value and can be used as collateral.