Recently, there have been quite a few questions about DeFi. First of all, everyone needs to distinguish between permissionless protocols and those governed by unified governance: - Protocol-governed ones include Aave, Spark, etc. - Permissionless ones include Morpho, Euler, etc. For permissionless lending protocols, most designs have each market managed by a curator. Many projects can either act as curators themselves or involve their stakeholders. So, it’s similar to a pool set up by the project team itself. For example, the most critical parameter—what collateral is supported—is managed by the curator. There’s no such thing as a lending platform endorsement here. But for projects like Aave and Spark, the assets in each market go through a governance process. If something goes wrong, the lending platform is likely to step in. Take issues like xUSD or certain stablecoin projects where the underlying assets have already encountered problems. This can lead to utilization rates skyrocketing to 95%–100%, with borrowers refusing to repay despite insanely high interest rates. Why? Because the collateral is already worthless, and there’s no way to redeem it. No matter how high the interest rate is, it’s just numbers at that point. Permissionless lending is similar to permissionless DEXs. You trust Uniswap, but if you buy into a shady token, Uniswap can’t do anything about it. So, for lending protocols, the most critical parameter is the collateral. Behind high interest rates, there might be a hidden “bad apple.” And who the curator is matters a lot.