# Collateral Assets

<table data-view="cards"><thead><tr><th></th><th></th><th></th><th data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td></td><td><strong>Depositing Collateral</strong></td><td></td><td><a href="cdps/icdp/deposit">deposit</a></td></tr><tr><td></td><td><strong>Withdrawing Collateral</strong></td><td></td><td><a href="cdps/icdp/withdraw">withdraw</a></td></tr></tbody></table>

## Overview

Collateral Assets can be deposited into the protocol to enable borrowing Kopio Assets against the value of the deposit. Each Collateral Asset has two [oracle providers](oracles) keeping the protocol updated with the most recent market information about it.

## Collateral Asset Types

The following is an example list of possible collateral assets:

* `Native Cryptocurrencies` Existing digital assets available within the relevant blockchain ecosystem such as ETH.
* `Stablecoins` Assets pegged to a stable fiat currency, such as USDC, DAI, or USDT.
* `Wrapped Cryptocurrencies` Wrapped tokens representing another cryptocurrency eg. wBTC WETH.
* `Synthetic Assets` Some Kopio Assets can also be supplied as collateral.
* `Liquid Staking Derivatives` Popular liquid staking tokens eg. stETH, rETH

## Criteria

Initially the protocol founding team has decided a list of assets to include but later on new collaterals can be added using a governance module.

Collateral Assets in the protocol can basically be any ERC-20 token with following properties

* Has value.
* Sufficient on-chain liquidity.
* Good reputation.
* Price feeds available from supported oracle networks.
* Does **NOT** have a fee-on-transfer mechanism. This is subject to change later on.

{% hint style="info" %}
Kopio Asset can also be whitelisted as a Collateral Asset.
{% endhint %}

## **Collateral Factor**

Collateral Factor (CF) is a value for each collateral based on its risk profile. Generally, the higher the volatility of an asset, the higher the risk.

It is a fraction between 0 and 1 that is used to calculate the risk-adjusted valuation of deposited collateral. Given an asset _a_, CF can be represented as follows:

$$
CF_a = [0,1]
$$

{% hint style="info" %}
A _Collateral Factor_ of **1** means the protocol values the Collateral Asset in full when calculating a [CDP](cdps)'s total collateral value.
{% endhint %}

### Collateral Factor Example

{% hint style="success" %}
**Example**

* Collateral DAI has a cFactor of **1**. Oracle price **$1**
* Collateral wBTC has a cFactor of **0.8.** Oracle price **$15000**

Bob deposits 100 DAI as collateral currently worth $100

Bob does another deposit with 0.1 wBTC currently worth $1500

Calculating the individual deposit values:

1. **DAI** = $100 \* 1 = **$100**
2. **wBTC** = $1500 \* 0.8 = **$1200**

Protocol will consider Bobs total collateral value as:

$1200 + $100 = **$1300**
{% endhint %}
