A collateralized security in the digital asset space is a token or financial instrument backed by other digital assets held as collateral. This backing provides a layer of assurance, reducing default risk for the security holder. The value of the collateral typically exceeds the value of the issued security, maintaining a robust reserve.
Context
This term is fundamental to decentralized finance protocols, particularly in stablecoins and lending platforms. News articles often discuss the stability and risk profiles of such securities, especially concerning collateralization ratios and liquidation mechanisms. Regulatory bodies are also examining these structures to determine their classification and oversight requirements.
Aegis introduces a provably safe and live protocol for securing expansion chains with primary-chain stake, resolving security challenges posed by dynamic validator withdrawals.
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