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Composable DeFi

What is Composable DeFi?

The term “composable DeFi” describes the compatibility of several DeFi protocols. DeFi is open-source, and various dApps and protocols can benefit from the code and utility of one another, creating a synergistic effect.

For instance, there are numerous DeFi goods on the Ethereum blockchain. Anyone can create dApps and incorporate any component from any existing protocol on the Ethereum chain by paying the gas charge for transactions because it is permissionless.

This is possible because smart contracts have a composability feature built in. Developers (and customers) can carry out complicated schemes like borrowing ERC-20 tokens from one platform thanks to composability. They are changed into another ERC-20 token on a different platform, and from there, another ERC-20 token is swapped for the first one.