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How can tokenized assets be used as collateral?
Some lending protocols accept eligible tokenized assets as collateral for a loan. Borrowing capacity depends on collateral rules, valuations and the amount a lender is willing to advance.
What should I understand before using it?
Interest, liquidation thresholds and repayment terms vary. Falling collateral values can trigger liquidation. Tokenized collateral can also carry issuer, custody and transfer restrictions that affect whether a lending protocol can use it.