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These examples show common ways to use Multi-Asset Collateral. For how the loan, LTVs, interest and liquidation work, see that page.

Perp trading without selling your tokens

Example: an account holds only SPY tokens. Without Multi-Asset Collateral, trading perps requires selling SPY for USDG. With it, the SPY can be moved into the perps account and used as collateral.

Hedging

Example: an account holds a Stock Token and hedges broad-market exposure by shorting SPY perps. Instead of selling the token for USDG, the token can be moved into the perps account to margin the short. The same applies to holding a token and shorting the perp on the same asset. A hedge may not fully offset losses, and you still pay funding on the perp, interest on any loan, and carry liquidation risk.

Basis trading

A basis trade takes opposite positions in a token and a perp on the same underlying, usually to collect funding. For example, you buy NVDA token and short the same notional of NVDA perp.
  • With USDG only, the short is backed only by its own margin. A small rise in NVDA can make the perp leg liquidatable, even though the token leg gains just as much.
  • With Multi-Asset Collateral, the NVDA token backs the short. As NVDA rises, the token’s value rises with it, which offsets the perp’s losses. NVDA has to rise much further before the account becomes liquidatable.
Illustrative assumptions: a short of notional N with initial margin fraction i and maintenance margin fraction m (from the market’s margin parameters), token worth N at entry with maintenance LTV Lₘ, no other USDG, and fees, funding and interest ignored. Let NVDA rise by a factor k.With USDG only: the perp leg has N × i of margin and loses N × (k − 1). It is liquidatable once i − (k − 1) falls below the maintenance margin m × k, that is at k = (1 + i) ÷ (1 + m), just above 1.With Multi-Asset Collateral: the maintenance loan need is the perp’s maintenance margin plus its loss, N × (m × k + k − 1). Maintenance capacity is Lₘ × the token’s value, N × Lₘ × k. The need exceeds capacity once k > 1 ÷ (1 + m − Lₘ), which is far above 1 when Lₘ is well above m.
Every one of these uses carries liquidation risk. Losses on your perps and a fall in your collateral token both push the account toward the same liquidation line. See Liquidation.