Lending Pool
A smart contract aggregating digital assets from suppliers for lending and borrowing.
What is Lending Pool?
Lending pools are smart contracts where users deposit digital assets (e.g., DAI, USDT, ETH) to earn interest, and borrowers draw funds against collateral. Pools dynamically adjust interest rates based on utilization rates, ensuring liquidity balance. For instance, Aave’s Ethereum pool held over $10 billion in assets in 2025, supporting assets like wBTC and stablecoins. Suppliers earn variable or fixed rates, while borrowers pay based on demand.
Lending pools are the backbone of DeFi lending, enabling permissionless access to capital. In 2025, cross-chain pools on Layer 2 solutions like Optimism reduce fees, boosting participation. Protocols incentivize deposits with governance tokens, but risks like smart contract bugs require users to assess pool security via audits.
Related Terms
Mobile Payment
Payments made via mobile devices, often using apps or QR codes.
Matching Engine
The algorithm that pairs buy and sell orders in exchanges based on rules like price-time priority.
Market Order
An order to buy or sell a digital asset immediately at the best available current price.
Machine-to-Machine Transactions
Automated digital asset exchanges between systems without human intervention.
Multi-Hop Swap
A DEX trade that routes through multiple liquidity pools or token pairs to achieve the desired swap, optimizing price and reducing slippage.
OP Stack and OP Superchain
The modular, open-source framework for building Ethereum Layer 2 chains, forming the interconnected Superchain ecosystem.