Glossary
Collateral Factor
A collateral factor is the percentage of an asset's value that a lending protocol allows users to borrow against, reflecting liquidity and risk assumptions.
Plain-English meaning
In this game, Collateral Factor is used as a vocabulary card for recognizing how market and technology concepts fit together. The short idea is: borrowing power against collateral.
The term is not shown as a recommendation. It is included so players can learn the language they may see in exchange interfaces, wallet prompts, research notes, AI product pages, or on-chain analytics dashboards.
Why it belongs with DeFi Risk Primitives
These concepts explain how DeFi lending systems measure collateral quality, trigger liquidations, and account for losses.
When solving the puzzle, compare the job this term performs with nearby cards. A correct group usually shares a function, risk type, workflow, or market structure rather than simply sharing similar wording.
Where you might see it
You might encounter this term while reading educational explainers, product documentation, risk disclosures, market dashboards, or beginner guides. Always separate vocabulary learning from financial decision-making.