What are DeFi lending protocols and how do they differ from traditional banking?

DeFi lending protocols are decentralized financial applications built on blockchain networks that allow users to lend and borrow cryptocurrencies without intermediaries like banks. The key differences from traditional banking include:

• Decentralization: No central authority controls the protocol
• Permissionless: Anyone with a wallet can participate
• Transparency: All transactions are recorded on-chain and publicly visible
• Global Access: Available 24/7 to anyone with internet access
• Programmable: Smart contracts automate lending/borrowing processes
• Over-collateralization: Borrowers must provide collateral worth more than the loan

Traditional banks rely on credit scores and legal frameworks, while DeFi protocols use smart contracts and over-collateralization to manage risk.