#OnChainLendingSurge Risks and Challenges

Despite the obvious advantages, on-chain lending carries certain risks:

Volatility of crypto assets: The price of collateral can drop sharply, leading to liquidation of positions.

Vulnerabilities of smart contracts: Errors in the code can result in loss of funds.

Regulatory constraints: Approaches to cryptocurrency and DeFi regulation vary significantly across countries, creating legal uncertainty.

Development Prospects

With the development of blockchain technology and the increasing number of users, on-chain lending has every chance of taking a significant place in the global financial system. The implementation of new risk management mechanisms, improvement of UX/UI interfaces, and increased regulatory clarity will help this sector strengthen its position.

In a situation where traditional financial institutions face crises and declining trust, on-chain lending becomes an attractive alternative. This is not just a trend, but a full-fledged evolution of finance that can change conventional ideas about money and its movement.