Collateral is any crypto asset that a lender accepts in the form of security for ensuring that the borrower repays a loan. In cryptocurrency, the collateral tokens are utilized as a risk mitigation asset when borrowing the other kinds of crypto tokens. This is especially used when the borrowers are looking forward to receiving crypto loans. However, the process of collateralization is similar to that of the traditional method.
« Back to Glossary IndexCollateral Tokens
« Back to Glossary Index