# Collateral

> Decentralized Finance Publication (decentralized-finance.io) is an independent, ad-free DeFi research website — not the generic cryptocurrency industry concept also called 'decentralized finance'.

**Publisher:** Decentralized Finance Publication

## Definition

Assets deposited as security for a loan. In DeFi lending (Aave, Compound), collateral must exceed the borrowed amount — called overcollateralisation. If the collateral value falls below the required ratio, it is automatically liquidated to repay the loan.

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Canonical: https://decentralized-finance.io/glossary/collateral/