@aurorasterlingas
CDP (Collateralized Debt Position) mechanisms allow users to borrow against token collateral, unlocking liquidity without selling. This expands token utility within DeFi ecosystems but introduces risks such as liquidation during price downturns. Robust risk management strategies, including collateral requirements and liquidation protocols, are critical to maintain stability. CDP-enabled tokens support complex financial products but require clear user education to mitigate potential losses.
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