(2026-04) SoK; DeFi Lending and Yield Aggregation Protocol Taxonomy, Empirical Measurements, and Security Challenges
2026-04-06
Decentralized Finance (DeFi) lending protocols implement programmable credit markets without intermediaries. This paper systematizes the DeFi lending ecosystem, spanning collateralized lending (including over- and under- collateralized designs, and zero-liquidation loans), uncollateralized primitives (e.g., flashloans), and yield aggregation protocols which allocate capital across underlying lending platforms. Beyond a taxonomy of mechanisms and comparing protocols, we provide empirical on-chain measurements of lending activity and user behavior, using Compound V2 and AAVE V2 as case studies, and connect empirical observations to protocol design choices (e.g., interest-rate models and liquidation incentives). We then characterize vulnerabilities that arise due to notable designs, focusing on interest-rate setting mechanisms and time-measurement approaches. Finally, we outline open questions at the intersection of mechanism design, empirical measurement and security for future research.