Money Market (DeFi)
A pooled market for short-term lending and borrowing of crypto at algorithmic interest rates.
In DeFi, a money market is a lending protocol’s pool where suppliers earn interest and borrowers pay it, with rates set automatically by supply and demand rather than negotiated. “Money market” borrows the traditional-finance term for markets in short-term, highly liquid lending.
These markets are DeFi’s interest-rate backbone: they price the cost of leverage, enable shorting (borrow an asset, sell it, buy back cheaper), and let idle assets earn yield. Rates can swing violently — a sudden borrowing spike can push an asset’s rate from 3% to 30% in hours — which is itself a useful real-time signal of where leverage demand is concentrated.