2 yr. ago
1/2
BLOCKCHAIN TIPS
Collateral
Almost every knows what a Collateral is, but for the benefit of those that don't, we'd breeze through it today.
A Collateral is a financial instruments or assets pledged towards the receipt of a loan, with the intent of retrieving the assets when the loan is repaid. Financial institutions typically ask for collaterals when you want a loan, and they need assurances that you will pay back.
In other words, Collaterals are those assurances, and can be sold by the financial institution in the event that you default on your loan payment.
BLOCKCHAIN TIPS
Collateral
Almost every knows what a Collateral is, but for the benefit of those that don't, we'd breeze through it today.
A Collateral is a financial instruments or assets pledged towards the receipt of a loan, with the intent of retrieving the assets when the loan is repaid. Financial institutions typically ask for collaterals when you want a loan, and they need assurances that you will pay back.
In other words, Collaterals are those assurances, and can be sold by the financial institution in the event that you default on your loan payment.
2/2
In the crypto space, this still applies. One who wishes to make a purchase, but doesn't have the required token for it could deposit the token owned equal to the principal (money borrowed) + interest to receive the money desired. Upon repayment, the tokens are returned to the owner, but upon non-payment after the stipulated date, the tokens are sold to replace the principal + interest.
In the crypto space, this still applies. One who wishes to make a purchase, but doesn't have the required token for it could deposit the token owned equal to the principal (money borrowed) + interest to receive the money desired. Upon repayment, the tokens are returned to the owner, but upon non-payment after the stipulated date, the tokens are sold to replace the principal + interest.
2 yr. ago
In response Black_Scorpion Scorpion to his Publication
