Composability on the Algofi Lending V2.
Composability is a system design principle that deals with the inter-relationships of components. It is a good design principle because it promotes modular building -- specing out and building systems module by module as opposed to building the entire system as a monolith. Modular building results in systems that are easier to evaluate and change. In the context of DeFi, this means building protocols that are safer and easier to collaborate on.
Beyond the improved safety, composability in DeFi allows protocols to "talk" to each other, sending their outputs as input to another system. For example, an AMM that sends the output asset into a lending protocol to earn interest in one atomic group. DeFi protocols are the financial legos of the new monetary system and can be connected in tandem to create previously unimaginable use cases and financial products. This is unlike the traditional financial system which has a limitation on composability due to its permissioned nature, high barrier to entry, and costs.
The V2 lending protocol supports composability, so lending, borrowing, repaying, and withdrawing operations can be composed with other DeFi protocols that support composability such as the Algofi DEX. Developers are encouraged to consider interesting composable applications to build on the Algofi Lending V2 and DEX. Reach out to us on social media to chat about projects.
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