In What Ways Can Different Types of Cryptocurrency Be Used as Collateral?

Cryptocurrency can be used as collateral in several ways, including stablecoins, major cryptocurrencies like ETH or BTC, and governance tokens. Stablecoins offer low volatility but lower yield, while volatile assets offer higher yield but require higher collateralization ratios.

The smart contract must support the specific token standard and include logic to handle the price volatility of the chosen collateral asset. The contract's risk parameters define which assets are acceptable.