Lending and borrowing protocols in decentralized finance (DeFi) are innovative financial services that operate on DeFi, this allows users to lend and borrow assets without traditional financial intermediaries. These protocols typically use smart contracts, which are self-executing contracts with the terms of the agreement directly written into code, ensuring transparency and security. Lenders provide their assets to a liquidity pool, earning interest in return, while borrowers can take out loans by providing collateral. The interest rates are usually determined algorithmically based on the supply and demand of the assets in the pool. These protocols also incorporate mechanisms to manage risks, such as liquidation of collateral if the value falls below a certain threshold, to protect the lenders' assets.