> For the complete documentation index, see [llms.txt](https://square1-hello.gitbook.io/square-1/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://square1-hello.gitbook.io/square-1/decentralized-finance/defi-overview/core-defi-concepts.md).

# Core Defi Concepts

## Collateralization 

Collateralization refers to the way debt systems ask for some form of collateral input to cover the cost for a financial loan. In Defi there are both overcollateralized and undercollateralized debt systems.

to be continued....