Credit Delegation

In Decentralized Finance (DeFi), credit delegation allows a user to deposit funds into a specific smart contract or DeFi protocol to earn interest while simultaneously enabling them to extend credit in the form of borrowing power to other users. The specifics terms of the loan can be determined off-chain via legal contracts or on-chain using smart contracts. DeFi credit delegation enables fund depositors to earn an additional layer of yield on top of the protocol yield and allows the borrowers to access the uncollateralized loan.