Liquidity Without Liquidation
Backed by the best
Collar is a DeFi borrowing solution powered by marketmakers instead of liquidators.
Collar is a lending protocol powered by marketmakers instead of liquidators.
Using a specialized financial agreement called “Prepaid Variable Forward,” borrowers remove the risk of liquidation by capping their potential upside.
Key Features
Unmatched LTVs
Collar offers industry leading LTV, allowing you to borrow more against your assets
Fully Collateralized
Marketmakers post collateral that is lost if the asset rallies and earn profit if the asset declines
Asset Agnostic
Borrow any asset provided by a marketmaker
Credit Agnostic
Borrow with zero risk of default, as well as no counterparty risk
By the Numbers
$274M
Committed Notional
38
Private Beta Clients
+293k
Vault Interactions
Team
J. Paul Meyer
Founder & CEO
Michael Moulton
Head of Operations
Carlos Di Matteo
Protocol Lead
.png)
Jonathan Hodak
Frontend Lead
Arthur Deygin
Protocol Security Lead
Frequently Asked Questions
Is Collar live?
We’re currently in Private Beta as we finalize a few key features and iterate on user feedback. You can request access above.
Why is it called Collar?
Collar is short for “COLlateralized Lending ARrangement”. It also refers to an options strategy that closely mimics the payout of Collar protocol.
How do you mitigate liquidation risk?
By hedging collateral upfront.
How do you hedge collateral?
The protocol swaps the collateral to the user's chosen liability token (typically stables), mitigating any downside risk.
But what if the asset appreciates in value?
Upon execution, the protocol draws collateral proportionally from each marketmaker providing liquidity to the pool with the highest ceiling price. This ensures best execution for users.
Why should marketmakers provide liquidity to Collar?
Because they profit by hedging the volatility using a technique known as “gamma scalping”. This helps them make a small spread to fund their operations. In exchange for this, marketmakers guarantee the upside of Collars.
How big is this “spread”?
Like any spread, it’s a function of the number of marketmakers. We anticipate going live with three sophisticated options marketmakers from day one who we’ve partnered with.
Does swapping create slippage?
Yes. This, and the fact that returns are capped are one of the few downsides of Collar. Ceilings and floors for collars are calculated based on the price the swap is filled at.
What venues does the protocol swap on?
For now, Uniswap, but we plan to expand this to popular dex aggregators across any chains we deploy on.
Why would I cap my returns?
Because in bull markets it can be beneficial to take chips off the table or even redeploy borrowed collateral into a new position for greater capital efficiency. Users can also “roll” their positions higher as assets appreciate to maintain exposure so long as there is sufficient marketmaker-provided liquidity.
How do I make money?
You get some of the marketmaker's locked collateral if the price has increased at maturity.
What if a market-maker fails like in 2022?
All marketmaker collateral is locked into Collar’s smart contracts, so they'll only get money back at maturity once the final price of the asset is in.
How are you different from AAVE, Compound, and other lending protocols?
We don’t liquidate your collateral at the worst possible time! We’re time-based, not price-based.