Debt management encompasses the strategic processes and actions undertaken to control and reduce outstanding financial obligations. This involves budgeting, repayment scheduling, and potentially refinancing or restructuring debt to optimize financial health. Effective debt management seeks to minimize interest accrual and ensure timely fulfillment of liabilities.
Context
Within digital asset markets, debt management concepts apply to decentralized lending and borrowing protocols. Users take out loans against cryptocurrency collateral, and the management of these positions, including monitoring collateral health and executing repayments, is crucial. News often reports on strategies employed by users and protocols to manage loan positions amidst volatile crypto asset prices, aiming to avoid liquidation.
The protocol's smart collateral system unifies liquidity provision and lending, dramatically increasing capital efficiency across the Ethereum DeFi stack.
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