On many DeFi platforms, users can collateralize one cryptocurrency or token in order to borrow another cryptocurrency or token, such as borrowing DAI using Ether (ETH). this is somewhat similar to using your house as collateral for a loan from a bank. Typically, you must provide a larger percentage of your cryptocurrency or token as collateral for a DeFi loan, such as using $100 of ETH to borrow $70 of DAI (i.e. 140% LTV, or loan by value). This helps support the stability of the system.

On many DeFi platforms, users can collateralize one cryptocurrency or token in order to borrow another cryptocurrency or token, such as borrowing DAI using Ether (ETH). this is somewhat similar to using your house as collateral for a loan from a bank. Typically, you must provide a larger percentage of your cryptocurrency or token as collateral for a DeFi loan, such as using $100 of ETH to borrow $70 of DAI (i.e. 140% LTV, or loan by value). This helps support the stability of the system.