On-chain Crypto Collateral Offers Borrowers Improved Terms — Sygnum Exec
Fabian Dori, CIO at digital-asset bank Sygnum, says that loans backed by on-chain crypto collateral (direct tokens) tend to come with better terms than loans collateralized with ETFs or off-chain assets.
Benefits cited include more liquidity (the lender can execute margin calls any time), higher loan-to-value (LTV) ratios, and real-time liquidation when needed.
On-chain collateral helps avoid issues like market closure risk — e.g. margin calls are much easier when dealing with tokens directly rather than something like an ETF after hours.
The sector is still emerging, but growing interest from TradFi institutions and crypto banks suggests this type of lending will become more common as legal, regulatory, and infrastructure risks are better managed.
