Lending and borrowing

What it is

Protocols where users deposit crypto to earn interest, and others borrow against collateral they post.

What they share

Loans are over-collateralized and enforced by code: if a borrower's collateral falls below a set level, it is sold automatically (liquidated) to repay the loan. The token governs the risk settings that decide which assets can be used and how much can be borrowed against them, and on some it also backstops the protocol if liquidations fall short.

What separates them

• Pooled versus isolated markets. Aave runs large shared pools; Morpho lets separate markets and curated vaults set their own risk, so one bad asset does not touch the rest.
• Ties to a stablecoin issuer. Spark is the lending arm of the Sky ecosystem.