Peer‑to‑Peer Lending
Also known as: P2P Lending, Decentralized Lending
A decentralized method where individuals lend directly to each other via protocols.
Peer‑to‑Peer (P2P) Lending in Web3 refers to decentralized platforms that enable individuals to lend and borrow digital assets directly—without traditional intermediaries like banks. Smart contracts enforce loan agreements, terms, collateral, and repayment schedules. P2P lending protocols offer customizable interest rates, collateral types, and automated liquidation mechanisms. This model enhances access to credit, financial inclusion, and efficiency, but carries collateral risk, smart contract vulnerabilities, and regulatory considerations.