Blockchain-Based Peer-to-Peer Decentralised Lending and Borrowing System

Abstract

Abstract: A decentralized peer-to-peer lending and borrowing system represents a transformative paradigm shift in the traditional financial landscape. This abstract explores the concept, benefits, and challenges of such a system, which leverages blockchain technology and smart contracts to facilitate direct, trustless interactions between lenders and borrowers. In this innovative system, intermediaries like banks are circumvented, enabling individuals to participate directly in lending and borrowing activities. Blockchain's decentralized ledger ensures transparency, security, and immutability of transaction records, while smart contracts automate the execution of loan agreements, thereby reducing the risk of default and eliminating the need for intermediaries. Key advantages of this decentralized system include increased financial inclusivity, reduced interest rates, and a broader pool of lenders and borrowers. It fosters a more efficient allocation of capital by matching lenders and borrowers based on predetermined criteria, thereby reducing information asymmetry.