Collateralized Loans

       Collateralized loans are a means through which it is possible to receive a line of credit by putting some assets up as collateral.

     Say you need $5,000 and you own 200 ETH. You dont want to get rid of your ETH possessions because you are extremely certain that the price of Ethereum will rise in the coming 6 months, but need cash now. So as a means to access some liquidity, you go to a loan provider, post 25 ETH as collateral (ETH is $400each) coming out to $10,000 as collateral for the $5,000 right now. You have 6 months to pay back your loan + premium (say $5,250 total). When you pay back, the assets that you posted as collateral is release to you. But, there is a twist. While your assets are locked in collateral, ETH rises to $800. By rising up in price, the collateral:loan ratio re balances and the $5,000 you received are payed off, your loan is closed, the $5,250 is deducted from the loan, netting you the loan amount + the price appreciation of your posted/collateralized assets.

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