DeFi Digest: JellyFi and Kong Land

Undercollateralized lending and borrowing is a service that many DeFi projects have been attempting to offer. Because of the anonymous nature of DeFi, there are limited repercussions for malicious actors if they default on undercollateralized loans from protocols.

As such, the largest DeFi lending protocols are all overcollateralized, which makes them less capital efficient compared to the traditional financial system.