What is Collateralization Ratio?
Collateralization Ratio The value ratio between collateral provided and debt issued in DeFi lending or synthetic asset protocols, affecting liquidation risk and portfolio leverage.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Collateralization Ratio” Used in Practice?
Portfolio leverage risk is continuously monitored by tracking the collateralization ratio in DeFi positions.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Collateralization Ratio?
The value ratio between collateral provided and debt issued in DeFi lending or synthetic asset protocols, affecting liquidation risk and portfolio leverage.
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