Crypto borrowing is taking out a loan, in a stablecoin, another cryptocurrency or ordinary money, by pledging cryptocurrency as security. It is the borrower's side of the same market whose lenders, platforms and risks are explained in full in the Crypto Lending entry.
Most crypto loans are over-collateralized: the borrower must lock up crypto worth more than the loan, often 150% or more, because coin prices swing sharply. People borrow this way to get cash without selling their coins, or to buy more crypto with borrowed money. On decentralized finance (DeFi) protocols the loan is run by smart contracts with no credit check; centralised platforms act more like a lender holding the collateral.
The main risk is liquidation. If the value of the pledged coins falls too far, the protocol or platform sells them to repay the loan, often with a penalty, in a forced liquidation. Borrowers using centralised lenders also face the risk that the lender itself fails, as several did in 2022.