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  • Introduction
    • Mortgage product
    • Earn product
    • NEW! Refinance
  • How MortgageFi Works
    • Mortgage borrowers
      • Early repayment feature (ERF)
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    • Refinancing
  • Getting Started
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      • Mortgage Vaults
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  • FAQ
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      • Integration Process
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      • How to apply
    • Self-Balancing Protocol
      • Three Pillars
      • Protocol Design
      • How the System Balances
      • Security and Attack Vectors
      • Advantages of This Model
  • Under-Collateralized Loans
    • What are Under-Collateralized Loans?
    • Key Features
    • How it works
    • Risk Management
    • Benefits for Borrowers
  • Compared to other Lending
    • Use Case Example
  • Comparison Examples
    • Funding Rates and Position Stability
    • Zero-Sum Game vs. Mutual Benefit
    • Long-Term Holding vs. Short-Term Trading
    • Risk Profile
    • Costs and Predictability
  • Yield for Earn Vaults
  • Risk Management
    • Risk Management Strategies
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    • Ongoing Risk Management
  • Strategies
    • Long vs Short-term Strategy
      • Long-term strategy
      • Short-term strategy
      • Comparing the Strategies
    • Hedge against the bear market
    • Cross-Chain Operations
    • Token Sink
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  1. Under-Collateralized Loans

What are Under-Collateralized Loans?

Under-collateralized loans are loans that enable the borrower access for more funds than they deposit to create the loan contract. In our case we offer 50x leverage without risk of liquidation. In the context of MortgageFi:

  • Borrowers can secure loans by depositing as little as 2% of the borrowed amount as collateral.

  • This is in stark contrast to most DeFi platforms that require over-collateralization (often 150% or more).

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Last updated 1 month ago