Level 4 · The assets backing a borrow

What is collateral?

Collateral is supplied crypto that Aave can count toward your borrowing power.

Not every supplied asset is automatically collateral. It has to be enabled, and the market has to allow it.

Each collateral asset has an LTV and a liquidation threshold. Those come from Aave's current market configuration, not from Ronnie.

If most of your collateral is one volatile asset, that asset's price is usually the main risk.

Adding collateral can improve Health Factor. Removing it can worsen Health Factor.