Decentralized finance (DeFi) allows you to lend your crypto assets directly to others through smart contracts, earning interest without relying on a traditional bank. To get started, first choose a reputable lending protocol such as Aave, Compound or Maker. Research their supported assets, interest rates and track records for security. You’ll also need a Web3 wallet like MetaMask loaded with the tokens you plan to lend.
Connect your wallet to the DeFi platform and navigate to the lending section. Select the asset you wish to supply and approve the transaction in your wallet to grant the smart contract access. Once supplied, your deposit will earn a variable interest rate based on supply and demand. In many protocols you’ll receive interest‑bearing tokens in return (such as aTokens on Aave) that represent your claim on the pool. These tokens can often be used as collateral for borrowing or staked elsewhere to boost yield.
Understand the risks: smart contract bugs, platform insolvency and sudden liquidity shortages can impact your funds. Only lend assets you can afford to lock up for a while, diversify across multiple platforms and assets, and keep track of your positions. Many protocols offer safety modules or insurance funds to mitigate risk, but nothing is guaranteed. Monitoring community governance proposals and security audits can help you stay ahead of potential issues.