Collateralized lending is a form of secured lending where borrowers provide assets as collateral to obtain loans. If the borrower defaults, the lender has the right to seize the collateral to recover the loan amount. This type of lending is common in traditional finance as well as decentralized finance (DeFi) platforms in the cryptocurrency space. The assets used as collateral can range from cryptocurrency tokens to real estate or fiat currency, depending on the lending platform.