For the terminology used in this article, please see the Collar core protocol Key Modules page.

What's the difference between you and other lending protocols?

Collar is unlike Compound where assets are lent by supplying assets to a pool in which borrowers withdraw from. Instead, one of Collar's native tokens, the COLL token, is minted by depositing collateral into a vault and then borrowers can exchange the COLL token for assets in an AMM pool. COLL tokens derive their value from their ability to be redeemed for the underlying collateral after the loan expires.

Why fixed interest rates and how?

Pegged cryptoassets have the advantage of price stability. Collar enables users to use this to their benefit by having interest be paid up-front on loans. The interest rate paid is determined by supply and demand in the WANT/COLL Collar Swap AMM pool.

What are the risks of Collar๏ผŸ

Like all money market protocols in DeFi, there are smart contract risks and systemic risks of the cryptoassets being lent and borrowed. Collar has not yet integrated other DeFi protocols into its platform, so there are currently no additional risks.

Are only stablecoins available on Collar?

Collar currently supports the lending of several stablecoin pairs. Once the Collar DAO is launched, the addition of lending for other assets will be decided by the community via DAO governance.

Does Collar charge any fees?

Small AMM trading fees are incurred when making trades with Collar Swap. Besides this, and the fixed interest paid by borrowers to lenders, there are no additional costs to borrowing or lending with Collar.

How can I earn money using Collar?

There are currently two main ways to generate revenue using Collar:
  • Lend cryptoassets in exchange for COLL tokens which can be sold for profit before their expiry or redeemed after their expiry.
  • Deposit cryptoassets and COLL tokens into a Collar Swap AMM to be an LP and earn COLLAR tokens which can be held, staked, or sold.
Additional ways to use COLLAR tokens to claim revenue generated by the Collar platform will be implemented in the future via CIPs.

What is the COLLAR token used for?

COLLAR is the governance token for the Collar platform and gives its holder the right to vote on proposals to add functionality to the platform.
COLLAR also gives its holder the right to yield generated by the Collar platform and is the only currency accepted in auctions for unclaimed assets on the Collar platform.
COLLAR is primarily earned by adding liquidity to the Collar AMM. COLLAR can also be earned by staking COLLAR or by adding liquidity to the ETH/COLLAR pair.