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Collateral Factors

How much of an LP position counts toward borrowing capacity after risk discounts.

Overview

Collateral factors define what fraction of an LP position's recoverable value can support debt. Avana does not use the LP's headline mark alone. The Borrow Spoke first reconstructs and discounts the position, then applies the market's collateral factor to determine borrowing capacity.

How It Works

  1. 01

    The spoke admits only approved pools. Unlisted positions never reach valuation.

  2. 02

    The position is reconstructed, underlying assets are priced, and the result is discounted to recoverable collateral value.

  3. 03

    Collateral factors and market settings are applied. The spoke reports aggregate borrowing capacity to the Hub for enforcement.

Borrowable Value

Borrowable value is calculated per position, not as one flat number for the whole account. Two positions in different pools can produce different recoverable values and clear different collateral factors even if they look similar.

A supported LP position contributes borrowing capacity only after the spoke has admitted it, valued it conservatively, and applied the market's collateral factor.

Notes

  • • Exact collateral factors live in each supported pool's configuration.
  • • Different LP families can have different factors, liquidation thresholds, and bonuses.
  • • Read this together with Health Factor and Liquidation Framework when building monitoring tools.