IOU

An IOU is exactly what it sounds like—short for "I Owe You," it’s a little note or document that says one person owes another something. In the crypto world, IOUs can get a bit more high-tech. They can represent promises to repay assets or services, and they’re often used in peer-to-peer lending or on decentralized finance (DeFi) platforms. While an IOU isn’t the same as a legally binding contract, it serves as a record of an obligation, which can be really useful in the right context.

In some cases, IOUs can even be tokenized and traded on blockchain networks. This adds a layer of liquidity and transparency that you wouldn’t get with a regular paper IOU. It’s like being able to trade a promise for something tangible, and it all happens in a way that’s verifiable on the blockchain. This can be a big deal in decentralized systems where trust and reputation are key because you’re often dealing without the safety net of traditional intermediaries.

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