Crypto 101 (32)

A beginner-friendly guide to crypto launchpads, token launches, and risks.

Trade tokens without waiting for a buyer or seller.

Overcollateralization is a fundamental crypto lending principle, whereby borrowers pledge more collateral than the value of the loan they seek. In other words, the collateral provided by the borrower exceeds the amount of the loan, creating a buffer or cushion for the lender

Uncollateralized loans represent a form of borrowing in which the lender extends credit to the borrower without requiring any assets as collateral. This means that if the borrower fails to repay the loan, the lender cannot seize any collateral to recover the outstanding debt.

It represents the ratio of the loan amount to the value of the collateral provided to secure the loan. For example, if a borrower pledges $10,000 worth of Bitcoin as collateral and receives a loan of $7,000, the LTV ratio would be 70%.