Under-Collateralized Lending in DeFi: Over-Collateralization Barrier
The Problem with Over-Collateralization Most DeFi lending platforms work on over-collateralization. Borrowers must deposit assets worth more than the loan amount to secure a loan. This model protects lenders from defaults. But it also limits DeFi lending to those who already own significant crypto assets. Issues with Over-Collateralization: Excludes Many Users: Users without large crypto … Read more