Three modes of decentralized lending The four most famous decentralized loan agreements are Compound, Dharma, dYdX and MakerDAO, which can be divided into three modes: 1) P2P matchmaking mode Dharma and dYdX are peer-to-peer agreements, which match borrowers and borrowers. Therefore, the amount of loans and borrowings based on these two agreements is equal. For example, in Dharma Institute, smart contracts are used as "guarantors" to evaluate the asset prices and risks of borrowers. The creditor decides whether to lend to the borrower according to the evaluation result provided by the Guarantor. When the borrower fails to repay the loan on time, the Guarantor will automatically carry out the liquidation procedure. The longest loan period of Dharma Platform is 90 days, and the loan interest is fixed. The lender's funds are locked during the lending period and begin to earn interest after matching with the borrower. DYdX protocol is also a P2P model, but the main difference between it and other lending platforms is that DYdX also supports other transactions besides lending, such as futures trading. When traders open positions in dYdX, they will borrow margin, reach an agreement with lenders on terms and conditions through the platform, and conduct margin trading. Therefore, the target customers of dYdX are mainly margin traders. The interest on the dYdX platform is variable, and there is no lock-up period and maximum period for users to borrow money on dYdX. 2) The typical model of prudent monetary mode is markel Road, where there are no lenders, only borrowers, and the only loanable asset is Dai. The borrower borrows the newly created DAI by mortgaging digital assets (now ETH). Dai is a stable currency issued by MacDow platform and linked to the US dollar. The ratio of pledged assets to loans must be kept above 150%. Its interests are global and decided by MKR holders through voting. The interest rate is unstable, rising from 2.5% to 19.5% in more than a month. 3) Liquidity pool transactions take compound interest as an example. Debits and lenders trade through liquidity pools, rather than matching with counterparties. The interest rate of each loan and loan is determined by the liquidity of the fund pool, that is, the ratio between the total amount of money provided by the lender and the total amount of demand of the borrower fluctuates. Compound interest does not set a fixed loan term. Lenders can deposit funds into the loan pool, earn interest continuously, and withdraw assets at any time. The term of the borrower's contract is unlimited. Source: