Hey everyone, I'm curious about crypto loans and how they work, but I'm a bit confused. From what I understand, you can use your cryptocurrency as collateral to borrow other types of crypto, and you have to pay interest on the borrowed amount. I've also heard that they require "over-collateralization," which is pledging more crypto than the value of the loan to reduce risks.
I also came across some info saying that crypto loans are different from DeFi lending because they have fixed interest rates, don't require extra crypto addresses, and don't have gas fees. Plus, the borrowing process is supposed to be simpler.
Can anyone explain if I'm on the right track? How do crypto loans actually work, and what should I watch out for? Any tips or personal experiences would be really helpful. Thanks!
