Collateral Ratio
Collateral ratio compares the value of pledged assets with the value of the debt they secure.
Category
DeFi Credit Risk
These words explain how overcollateralized lending keeps accounts healthy until prices move.
How to recognize this theme
Terms for borrowing against collateral.
In a daily board, this category groups terms by their shared role. Look for four cards that describe the same mechanism, risk area, or workflow rather than four words that merely sound similar.
Educational context
These entries are vocabulary notes for learning. They are not project endorsements, token recommendations, exchange rankings, or trading signals.
Health Factor
Health factor estimates how close a lending position is to liquidation.
Borrow Rate
A borrow rate is the interest charged when a user takes out a loan against collateral.
Liquidation Threshold
The liquidation threshold is the level at which a position can be closed because collateral is no longer sufficient.
Borrow APY
Borrow APY is the estimated yearly cost paid by a borrower in a lending market.
Liquidation Penalty
A liquidation penalty is an extra cost charged when collateral is sold to repay an unsafe loan.