Glossary
CDP (Collateralized Debt Position)
A vault holding collateral against which the user mints a stablecoin or borrows another asset — the MakerDAO design that defined modern DeFi lending.
MakerDAO pioneered the CDP: lock ETH (or other approved collateral) into a vault, mint DAI against it up to the collateralization ratio, and pay a stability fee. If the collateral value drops below the liquidation threshold, anyone can liquidate it to repay the debt.
The pattern generalizes: any over-collateralized loan against a locked asset is a CDP under another name. The original Maker design remains the cleanest implementation and the model most others imitate.