Collateral is used when borrowing assets on WOO X. You are borrowing assets when trading with leverage or shorting a position.
WOO X will set a collateral rate (discount) for each token based on the liquidity and volatility of each token into reference.
Please see ▶ Collateral ratio.
Total collateral is the total collateral value based on the spot holdings and interest.
Collateral of a token = (holding + interest) * mark price * discount
Total collateral is the sum of all collateral.
*discount = collateral ratio, if holding + interest >= 0
*discount = 1 if holding + interest < 0
Adjusted collateral is the total collateral value with pending orders taken into account.
Adjusted collateral = Total collateral - (pending orders), which is (asset quantity*asset price* collateral ratio).
*discount = collateral ratio, if holding + interest + pending order quantity >=0
*discount = 1 if holding + interest + pending short quantity < 0
For example: Here are some scenarios if the BTC price is 10,000 $USDT with a collateral ratio of 0.85 (USDT’s collateral ratio is 1).