> For the complete documentation index, see [llms.txt](https://puff-the-dragon.gitbook.io/puff_drgn/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://puff-the-dragon.gitbook.io/puff_drgn/puff-university/defi-realm/lending-and-borrowing.md).

# Lending and Borrowing

The DeFi concept of lending and borrowing is similar to traditional finance, but in truly decentralized cases, no human intervention is involved or any middlemen.

<figure><img src="/files/0C0ClLinD0TPO47nDVoK" alt=""><figcaption></figcaption></figure>

<figure><img src="/files/Wi7TGr8KinBjCLnhI4ua" alt=""><figcaption></figcaption></figure>

A borrower will need collateral, and a lender will require an asset to lend. All lending and borrowing activities are conducted through smart contracts, which are executed when a set of rules is satisfied. Before delving into lending in crypto, you should thoroughly research those rules for a specific protocol so you don’t take on more risk than you intended.