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NFT Term

Deposit

Definition of Deposit from the NFTguild.com glossary.

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Users of decentralized applications often use security deposits consisting of digital assets and cryptocurrencies to incentivize honest behavior from all parties involved in a smart contract. If the users behave honestly as per the smart contracts specifications, the funds are returned. If the users act dishonestly, their deposit will be forfeited and returned to the defrauded counterparty.