What Is Crypto Collateral?

Crypto collateral refers to using cryptocurrency as collateral for a loan or other financial product. This can involve using digital assets such as Bitcoin or Ethereum as security for a loan or as collateral in a decentralized lending platform. The basic idea is that the value of the cryptocurrency serves as a guarantee that the borrower will repay the loan. If the borrower defaults, the lender can take possession of the collateral to recoup their losses. Therefore, the value of…