Collateralized Debt Position (CDP)
A vault where you lock crypto to mint a loan (often a stablecoin) against it — the mechanism behind DAI and similar assets.
A CDP is a smart-contract vault where you deposit collateral and, against it, mint or borrow a new asset — most famously MakerDAO’s DAI stablecoin, created by locking ETH or other assets. You reclaim your collateral by repaying the debt plus a stability fee.
CDPs are how a decentralized crypto-backed stablecoin stays solvent: every unit is backed by excess collateral locked in a vault. The risk you carry is the same as any leveraged position — if collateral value drops toward your debt, the position is liquidated at a penalty, so CDP users watch their health factor closely.