In the past couple of years there have been attempts to recreate the traditional financial system and the internet economy on a blockchain-based financial infrastructure, known as decentralised finance (DeFi).1
Structured around decentralised applications, DeFi provides quick, open, permissionless, immutable and highly interoperable protocols with little need for custodians, central clearing houses, or escrow services.2 Transactions are finalised in secure and verifiable ways via self-executing and composable 'smart contracts'3 (usually adopting a template known as the ERC-20 token standard deployed on the Ethereum blockchain network) with the support, should the circumstances require it, of 'oracles' to provide access to information residing off-chain.4
DeFi lending cannot be properly understood if examined in isolation from other (functionally) similar developments in crypto market practice. A comparison with another model of crypto lending, which relies on the involvement of intermediaries as direct providers of credit and/or custodians for the underlying collateral (hence, belonging to the realm known
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