What is a collateralized debt position (CDP)?

A collateralized debt position (CDP) is the position created by locking collateral in MakerDAO’s smart contract to generate its decentralized stablecoin, DAI.This system was introduced to the decentralized finance world by the MakerDAO team and is how its decentralized stablecoin DAI is created.

What are the different types of collateralized debt obligations (CDOs)?

Other types of CDOs include collateralized bond obligations (CBOs)—investment-grade bonds that are backed by a pool of high-yield but lower-rated bonds, and collateralized loan obligations (CLOs)—single securities that are backed by a pool of debt, that often contain corporate loans with a low credit rating.

What are derivatives & collateralized loan obligations (CLOs)?

Derivatives are products that derives their value from another underlying asset. Like put options , call options, and futures contracts, derivatives have long been used in the stock and commodities markets. Alternate name: Collateralized loan obligations (CLOs) are CDOs made up of bank debt.