Collateralized Loans

Collateralized DeFi loans are backed by collateral in the form of cryptocurrency. They work by allowing borrowers to put up a certain amount of crypto as collateral and borrow a smaller amount of money in return. The collateral is held in a smart contract and can be liquidated if the borrower fails to repay the loan. A practical example of a collateralized DeFi loan would be a borrower who wants to borrow $10,000 in stablecoins. In return, they would put…