Collateral Aggregation

Collateral aggregation is the process of pooling various assets into a single account to serve as backing for derivative positions. This allows traders to use a variety of tokens or stablecoins as margin, increasing capital efficiency.

The protocol must accurately value these assets in real-time, often using oracles to determine market prices. Collateral aggregation requires complex accounting to ensure that the value of the pool is sufficient to cover all liabilities.

It is a foundational feature of modern decentralized exchanges and cross-margin systems. Proper valuation and liquidity of the collateral assets are essential for system stability.