Collateral Specification

On Vela Trade, the collateral required for a trade depends on whether the user intends to long or short an asset.

Long Position:

While users can bring any type of collateral to initiate a trade, the collateral for a long position will always be the same as the asset being longed. For example, if the user wishes to long BTC, the collateral used will be BTC.

If a user deposits USDC to long BTC, the protocol will automatically swap the USDC for BTC, and that BTC will be used to open the long position, with the leverage specified by the user.

For assets available in the pool (BTC and USDC), the collateral for long positions will be BTC.

Short Position:

For all short positions, the collateral will always be in USDC.