How DeFi lending got here and what’s missing going forward
Oct 10 · 5 min read on MEDIUM
Lending is the natural next step for any new nascent financial market. The house of Rothschild got its start by collecting and exchanging coins (moneychanging). Once they had enough value under their custody, the natural step was to put it to work (moneylending). Then they expanded by doing the same for rulers locally and then, doing the same across Europe.
That’s analogous to what happened in crypto. Bitcoin was the first natively digital asset to accrue meaningful value at scale for multiple people. Others came with different narratives but following a similar path. Narratives are not as important here. The sole point is digital accumulation of wealth.
The next natural step is to have lending. Lending has existed in some form or another in the crypto markets from the very beginning. Early websites like BTCJam had p2p lending functionalities and, arguably, the exchanges themselves were the first credit takers and providers, being through margin trading like Bitfinex pioneered at scale, or through perpetual futures leverage and funding, driven by BitMEX.