About a year ago I wrote about the potential of Modular lending in DeFi and how it would disrupt governance driven lending markets. The thesis has not played out as expected with Aave taking a major lead in attracting TVL, but I believe we are seeing the early signs of the benefits that modular lending unlocks.

Simply because devs can just build new things with modular markets!

The pace of change and experimentation in lending markets needs to vastly outpaces the development cycles that Aave follows. I’ll share two of my personal favourites in upcoming lending products to push this point further across.

246 Club

To understand what makes 246 Club unique, we need to start with a simple fact about crypto staking (not lending) – it’s traditionally been a one-dimensional game. When we stake ETH, we’re locked into a single yield stream. EigenLayer changed this by introducing restaking – suddenly, your staked ETH could work for you in multiple protocols simultaneously.

246 Club takes this concept and applies it to a large segment of DeFi: the DeFi lending markets. They call it “lending restaking,” and it’s as clever as it is simple.

Here’s how it works: Let’s say you’re a lender on Aave and you earn your yield and that would be the end of the story. But 246 Club introduces a new possibility through what they call “Credit Delegation.” Instead of your unused borrowing power just sitting there, you can delegate it to 246 Club, where it can be used to capture yields in other markets. You keep your original Aave position and yield, but now you’re earning extra returns when your deleg