Composable Finance
Also known as: DeFi Legos, Modular Finance, Composable Protocol Design
A design principle where DeFi protocols can interact and build on each other, enabling modular financial applications.
Composable finance refers to the interoperability and modularity of decentralized financial (DeFi) applications, allowing them to be combined or layered to create complex services. This property enables innovation, as developers can build new products using existing smart contracts as building blocks. For example, a protocol may use Aave’s lending layer, Uniswap’s liquidity pools, and Chainlink oracles in one dApp. While composability accelerates development, it also increases systemic risk due to dependency chains—if one component fails, others may be affected.