# Collateral

## Definition

Collateral is an asset committed to secure an obligation such as a DeFi loan, where protocol rules can permit liquidation if required conditions are no longer met.

## What it means in practice

Collateral value is often monitored against debt using prices supplied by markets or oracles.

## How this concept appears in Terenval Wallet

Terenval can hold or sign transactions involving assets later used as collateral, but the collateral rules come from the external lending protocol.

**Important:** Understand liquidation thresholds and what asset will be seized before opening a collateralized position.

**[Install Terenval Wallet](https://wallet.terenval.com/?lang=en)**

## Related terms

- [Lending protocol](https://wallet.terenval.com/glossary/lending-protocol/)
- [Crypto borrowing](https://wallet.terenval.com/glossary/borrowing/)
- [DeFi](https://wallet.terenval.com/glossary/defi/)
- [smart contract](https://wallet.terenval.com/glossary/smart-contract/)
- [Token approval](https://wallet.terenval.com/glossary/token-approval/)
- [Liquidity pool](https://wallet.terenval.com/glossary/liquidity-pool/)

## Related Terenval Answers

- [How to Secure a Non-Custodial Crypto Wallet](https://wallet.terenval.com/answers/how-to-secure-non-custodial-crypto-wallet/)
- [How to Send Crypto Safely Between Wallets](https://wallet.terenval.com/answers/how-to-send-crypto-safely-between-wallets/)
- [Can One Crypto Wallet Manage Multiple Blockchains?](https://wallet.terenval.com/answers/can-one-crypto-wallet-manage-multiple-blockchains/)

## Sources

- https://ethereum.org/en/defi/
- https://docs.walletconnect.network/
- https://wallet.terenval.com/info/security/

Official page: https://wallet.terenval.com/glossary/collateral/