A lending pool is a collection of funds contributed by multiple users to facilitate lending and borrowing activities. Participants deposit their cryptocurrency into the pool, where it earns interest. Borrowers can take out loans from this pool by providing collateral, ensuring that lenders are protected. The interest rates for borrowing and lending are usually determined by supply and demand dynamics within the pool. These systems are often facilitated by smart contracts, which automate the process and ensure transparency. Users can easily track their deposits, loans, and the corresponding interest earned or owed. Lending pools make it easier for individuals to access loans without needing traditional banks, lowering barriers and promoting financial inclusivity. They also create opportunities for users to earn passive income through the interest generated from their deposits.