What is the purpose of collateral in DeFi lending proto - Practice (Sanskrit) - ObjectiveMcq

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What is the purpose of collateral in DeFi lending proto - Practice (Sanskrit) - ObjectiveMcq

HomePracticeBlockchainBasicsWhat is the purpose of collateral i...

Basics BlockchainMedium

What is the purpose of collateral in DeFi lending protocols?

Correct Answer: A — To secure the borrowed assets and minimize default risks

Explanation:

In DeFi lending protocols, collateral is provided by borrowers to secure loans, ensuring that lenders are protected against default risks.

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