Crypto glossary
Composability
Composability is the ability of blockchain apps and smart contracts to plug into each other freely, so new products can be built from existing ones.
On a public blockchain, every smart contract is open and can be called by any other contract without permission. A developer can take a lending market, a DEX and a stablecoin built by different teams and combine them in one product, much as software libraries are reused. DeFi protocols are often called money legos for this reason.
Composability is what makes flash loans, yield aggregators and one-click strategies possible: a single transaction can borrow, swap, deposit and repay across several protocols. It works best when everything lives on the same chain; splitting apps across many rollups and networks weakens it, which is one reason interoperability and shared sequencing are active research areas.
The downside is shared fragility. A bug, bad oracle price or depeg in one building block can ripple into every protocol that depends on it, so a product is only as safe as the weakest component it uses.
Example
A yield vault that deposits USDC in Aave, uses the receipt token as collateral to borrow ETH and stakes that ETH through Lido is chaining three protocols in a single strategy.
