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DeFi activity is growing, but the rules around it are still taking shape. Here’s what the stalled CLARITY Act, new uses for stablecoins, and recent regulatory guidance mean for people earning and borrowing onchain.

7 min read
Isolated
isolated lending markets 8 min read

The Architecture of Isolated Lending Markets

TL;DR Isolated lending markets contain risk by separating collateral types into independent, risk-isolated pools. When one market experiences stress (oracle failure, liquidity crisis, smart contract exploit), other markets continue to operate normally. This architecture trades some capital efficiency for dramatically better risk containment. For institutional allocators and protocols building on top of lending infrastructure, isolation is a prerequisite.

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