Glossary
Collateral Haircut
A collateral haircut is a discount applied to an asset's market value when calculating how much borrowing power it should support.
Plain-English meaning
In this game, Collateral Haircut is used as a vocabulary card for recognizing how market and technology concepts fit together. The short idea is: discount applied to collateral value.
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 Liquidation Risk
These terms explain risk controls and automated actions used when collateralized loans become under-secured.
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.