# What is a money market in DeFi?

A money market lets people lend coins to earn interest and lets others borrow them against collateral, with rates that rise as more of a coin is borrowed.

Also called lending and borrowing or lending pool.

## How it works on Rujira

- Lenders deposit a coin and earn the interest borrowers pay, minus Rujira’s 10% protocol fee.
- Borrowers lock collateral and can borrow up to a share of its value, set per coin.
- Rates follow how much of a coin is already lent out, and loans have no fixed term.

## What a public wallet gives away

An open loan on a public chain shows its collateral and its debt, and with them its liquidation price. A deposit shows how much you hold and where it earns, and over time maps your whole portfolio.

## In Redacted

With Redacted the loan or the deposit is the same on Rujira, but it sits in a Spending account that doesn’t lead back to you.

More: [Borrow and earn privately](https://redacted.gg/private/borrow/)

## Related terms

- [Loan-to-value (LTV)](https://redacted.gg/glossary/loan-to-value.md): Loan-to-value compares what you owe with what your collateral is worth. Borrowing $50 against $100 of Bitcoin is an LTV of 50%, and the higher it gets, the closer the loan is to liquidation.
- [Liquidation](https://redacted.gg/glossary/liquidation.md): A liquidation sells part of a borrower’s collateral to repay their loan when the collateral is no longer worth enough to cover it safely.
- [Price oracle](https://redacted.gg/glossary/price-oracle.md): A price oracle brings market prices onto a blockchain so that smart contracts can use them, for example to value collateral and decide when a loan gets liquidated.
- [Rujira](https://redacted.gg/glossary/rujira.md): Rujira is THORChain’s app layer: orderbook trading, swaps, lending, borrowing, staking and more, all with native coins held as THORChain secured assets.

Sources: [RUJI Money Market, Rujira documentation](https://docs.rujira.network/core-products/ruji-money-market)
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Page: https://redacted.gg/glossary/money-market/