Crypto Literacy: Over-collateralized Loans

The Opposite of Fractional Reserve Banking

I got a call from one of my clients this week, and he asked me to explain to him how the loans on Crypto.com work. He thought that he was able to access $4,000.00 by locking up $2,000.00 worth of bitcoin. In reality, it works the other way around. He is able to access $2,000.00 by locking up $4,000.00 worth of bitcoin. This is known as over-collateraliz…

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