Part 2/7:
Over-the-Counter (OTC) Transactions: Private loans arranged by centralized entities, where terms such as interest rates and loan-to-value (LTV) ratios are predetermined.
Prime Brokerage: These services provide integrated trading and financing options in crypto and ETFs.
On-Chain Private Credit: Utilizing blockchain technology to pool capital for off-chain deals through tokenized debt.
In contrast, DeFi lending can be classified into three types:
Lending Applications: Users can borrow cryptocurrencies by providing collateral based on automated risk models.
Collateral Debt Positions (CDPs): Users mint a synthetic USD-pegged token against their over-collateralized crypto instead of borrowing directly.