On-chain lending mechanism investigation

## Summary
> Please give a short summary of this research topic.

In traditional finance, borrowing money from banks is common. Is there an equivalent approach for borrowing funds on the blockchain? If so, what is the mechanism, and what are the potential risks involved?

## Description
> Please provide a detailed description to the topic.

There are several existing lending protocols, such as Compound and Aave, how do they handle lending activities on chain. You might explain the following technical terms:

1. Collateral Factor
2. Health Factor
3. Interest Rate Model
4. Liquidation
5. Overcollateralization

How do lending protocols incentivize the lender to provide funds, and how do they calculate the accrue interest? What is the potential risks in such lending activities?

## Source
> Please provide related resource for the topics, including articles, research papers and more.

[SoK: Decentralized Finance (DeFi)](https://arxiv.org/pdf/2101.08778)

[SoK: Lending Pools in Decentralized Finance](https://dl.acm.org/doi/abs/10.1007/978-3-662-63958-0_40)

[DeFi Protocols for Loanable Funds: Interest Rates, Liquidity and Market Efficiency](https://dl.acm.org/doi/10.1145/3419614.3423254)

[Aave](https://aave.com/)

[Compound](https://compound.finance/)

[Compound V3 Book](Compound V3)

## Others
> Please provide more information if there is any.

None