What is collateral?
Collateral is eligible supplied value used to support a borrowing position. A token must be allowed as collateral, and the account must enable that supply for collateral use. A supply-only balance and collateral are not interchangeable labels.
On this site, the Supply form offers Enable this supply as collateral when the route supports it. There is currently no separate control here to switch an existing supply’s collateral setting afterward.
What the collateral factor means
The V4 collateral factor is the proportion of an asset’s value counted as collateral in the position calculation. A Portfolio average combines the position’s collateral factors; it is not the factor of every individual asset.
Aave V4 collateral configuration (opens in a new tab)Why borrowing power is different
Borrowing power left is an estimate for the position, after accounting for existing borrowing. It is not the same as the tokens available in the market or the balance in ur wallet. Each of those figures answers a different question.
Use the preview for the actual proposed action. It checks the current position and shows the resulting health factor where available. A number shown in a table does not guarantee that a transaction will be accepted.
Collateral can change in value
The dollar value of collateral can fall while ur debt remains. Interest can also grow the debt. Removing collateral through a withdrawal can reduce the room supporting the loan.
Before borrowing or withdrawing from a borrowing position, compare health factor before and after. Do not treat a green badge, a high collateral factor, or the largest available amount as a recommendation.