What Are DeFi Synthetic Loans?

DeFi synthetic loans, also known as synthetic lending, is a type of lending in which a borrower receives a digital token that is pegged to the value of an underlying asset rather than the asset itself. The borrower can use this token as collateral to borrow another digital asset. Here's an example: Let's say John wants to borrow $10,000 worth of ETH, but he doesn't own any ETH to put up as collateral. So instead, he can use synthetic lending…