Lender FAQs
MoneySwitch aggregates the supply of each user into a liquidity pool which is then accessed by borrowers. This compares to an exchange or peer-to-peer platform, where a lender's assets are directly matched and lent to a borrower.
Liquidity pools improve liquidity as lenders can withdraw their assets at anytime, and borrowers can access liquidity at any time (unless every asset in the pool is borrowed). Furthermore, default risk is diversified, as lenders are no longer exposed to one borrower, but all borrowers as a collective.
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