Glossary · DeFi
Isolated market
Also: isolated markets, isolated lending market
An isolated market is a lending market defined by a single collateral asset, loan asset, oracle and liquidation threshold, so that bad debt arising in it cannot spread to lenders in other markets.
Related terms
- Curator
- A curator is the party that configures a lending vault, choosing which markets it may lend into, setting exposure caps and oracles, and appointing the allocator that moves capital within those limits.
- Collateral
- Collateral is the asset a borrower locks in a lending protocol to secure a loan, seizable by liquidators at a discount if the loan's value rises too far against it.
- Bad debt
- Bad debt is debt left outstanding after a position's collateral has become worth less than what it owes, a shortfall that falls on the protocol's lenders or its treasury rather than on the borrower.
Guides that explain Isolated market
Stay informed
Verifiable crypto journalism, delivered to your inbox.
Weekday mornings. No hype. No financial advice. Just what happened and why it matters.
No spam. Unsubscribe anytime. Read our privacy policy.