Event-Driven Architecture

Event-driven architecture is a design pattern where the system reacts to events or messages generated by other parts of the system or external actors. In blockchain, these events are often emitted by smart contracts when state changes occur, allowing other applications or services to listen and react in real-time.

This is essential for building responsive decentralized applications, such as front-ends that update automatically when a trade is executed or a liquidation occurs. It allows for a decoupling of the core protocol logic from peripheral services, making the system more modular and easier to maintain.

This architecture is key to the composability of DeFi, as protocols can easily interact with each other by listening for events. It creates a dynamic, interconnected ecosystem of financial services.