Permissionless Protocol

A permissionless protocol is a financial infrastructure that allows any user to interact with it without requiring approval from a central authority. These systems are open to all, fostering innovation and democratizing access to financial services like lending, borrowing, and trading derivatives.

The absence of gatekeepers ensures that censorship resistance is maintained, which is a key value proposition of decentralized finance. However, this openness also introduces unique challenges, such as the need for robust risk management and security protocols to protect the system from malicious actors.

Users interact with the protocol solely through their digital wallets, maintaining full custody of their assets.