GK Question

technology hard mcq

Which DeFi mechanism enables borrowing against crypto collateral without credit checks?

  1. Yield Farming
  2. Collateralized Lending
  3. Liquidity Mining
  4. Staking

Answer: Collateralized Lending

Collateralized lending protocols allow borrowing by locking crypto collateral, with automatic liquidation if collateral value drops.

Topic Digital Currencies: DeFi
Exam Relevance Banking, UPSC, SSC