10/18/2026
Why do some crypto loans require you to lock up assets? Collateral is an asset you lock up to secure a loan, it acts as a guarantee for the lender. The borrower locks up crypto and receives funds in return. Once the loan is repaid, the collateral is released. Collateral gives lenders protection if the borrower cannot repay, and it is common in DeFi lending protocols. If the collateral value drops too low, it may be liquidated, always take a moment to do your own research.
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