What Is Lending Protocol?
A market where you lend assets for yield, or borrow against what you have posted.
Definition
A lending protocol matches people with idle assets to people who want to borrow, without either of them meeting. Aave and Compound on Ethereum, Kamino and Marginfi on Solana.
How it works
Lenders deposit into a pool and earn a rate that floats with utilization. Borrowers post collateral and draw up to an LTV against it. Let the collateral fall far enough and the position is liquidated.
In Continuum
L/S tokens are ordinary SPL tokens, so a lending market can list one as collateral the way it lists any other. None has yet, and that call belongs to each market rather than to Continuum. Where one does list, the loop is: deposit the L token, borrow USDC, mint again with it. That is how leveraged exposure gets built here, without Continuum ever offering leverage itself.
Related terms
Posting more collateral than the loan is worth, so a price swing does not wipe it out.
Assets deposited to back or secure a financial position.
One number that tells you how close a borrowed position is to being closed.
Your position gets closed for you when the collateral no longer covers the debt.
More defi terms
Solana devnet · Test tokens only. Open a market with test tokens, or join the list for later access.