DeFi lending protocols are transforming the traditional lending landscape by offering decentralized, peer-to-peer lending and borrowing services. Unlike conventional financial institutions, DeFi platforms like Aave and Compound operate without intermediaries, leveraging smart contracts on blockchain networks to automate and secure transactions. Users can deposit their cryptocurrencies into liquidity pools, earning interest over time, while borrowers can take out loans against their crypto collateral, often with flexible terms and competitive rates. This system not only democratizes access to financial services, especially for the unbanked and underbanked populations, but also enhances transparency, as all transactions are recorded on an immutable ledger.