Basics
What Is Collateral?
Assets deposited to back or secure a financial position.
Definition
Collateral is what you put up so a position can be settled no matter which way it goes. In a synthetic protocol it backs the tokens you mint. In a lending market it backs what you borrow.
How it works
You deposit an asset, a smart contract holds it, and the tokens or the loan sit against it. Unwind the position and the contract releases the collateral.
In Continuum
Continuum takes stablecoin collateral. The live deployment is on Solana devnet and runs on cUSDC: deposit 1,000 cUSDC and mint L/S worth 1,000 cUSDC between them. The collateral stays in the program until someone burns a matched pair to get it out.
Related terms
More basics terms
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