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Perpetual Protocol supports multiple tokens as collateral. All supported collateral will be calculated as part of your Buying Power (in USD) which you can then use to trade or add liquidity.

By default, collateral is posted as USD, and PnL is paid out in USDC (the settlement token), meaning your PnL will be reflected in the "amount" field of your USDC. Other collateral types will only change in amount when collateral liquidation occurs.

Supported Collateral

The first non-USDC collateral was Ether (ETH)/Wrapped ETH (WETH). FRAX, OP and USDT are also supported.

Collateral Asset


Discount Ratio

Deposit Cap



25 million USDC




500,000 USDT




1,000 ETH




40,000 FRAX




600,000 OP

Correct as of June 28th, 2023

Note: If the deposit cap is reached, you will see an error message and will not be able to deposit. You can check the current collateral deposit cap status on the Overview page.

The weights of non-USDC collateral will affect your total collateral and free collateral, as shown by the equations below:

  • Total Collateral = the deposit amount of the collateral × the weight, in USD value

  • Free Collateral = the available amount of the collateral × the weight + PnL, in USD value

For example, if you have deposited $1,000 USDC and 0.50 ETH (where the price of ETH is $3,000), while your account value in USD will be $2,500, the total collateral will be:

=(1,000 x 1) + (0.5 x 3,000 x 0.825) = $2,237.5

The price of ETH will also impact the total/free collateral of your account, where if the price rises this will increase the total/free collateral. On the other hand, a declining ETh price will reduce the amount of collateral available.

The buying power provided by the total/free collateral is shown in the UI by the tooltip next to free collateral:

Remember to Deposit Some USDC

Even if you plan to use only non-USDC collateral, it's recommended to deposit some USDC to cover the following costs:

  • Exchange fees,

  • Funding payments,

  • Negative PnL

It is recommended to maintain a USDC balance to cover these costs. Withdrawals will be disabled if your account carries a negative USDC balance. See "Withdrawal Restrictions" below for more details.

Deposits & Withdrawals

To deposit, simply click on the button in the collateral table. You can choose which collateral to deposit with the dropdown menu. Note that if you deposit ETH and WETH, they will be merged into one collateral. However, you can withdraw as either ETH or WETH.

To withdraw, simply click on the button in the collateral table. You can only withdraw the “available” amount.

Withdrawal Restrictions

When your USDC balance is in debt (i.e., negative), your available amount will be shown as 0, and you are unable to withdraw any collateral. However, Total Collateral, Free Collateral, and Buying Power are unaffected. Learn more in the “Collateral Liquidation” section below. To enable withdrawals again, you’ll need to deposit enough USDC to make the balance positive.

Collateral Liquidation

Collateral liquidation is handled by converting your non-USDC collateral into USDC, minus fees. Your collateral may be converted to USDC when any one of the following conditions are met:

  • Margin ratio falls below 6.75% (the position maintenance margin threshold of 6.25% plus a buffer of 50 basis points),

  • USDC debt > non-USDC token value × 0.75,

  • USDC debt > $10,000.

When collateral liquidation happens, your non-USDC collateral will be converted at a rate shown by the formula below:

Collateral sale price = [index price x amount] x [1 - discount ratio]

The amount of USDC that's returned to you is show by the following formula:

USDC Collateral returned to trader = [Collateral sale price] x [1 - IF fee rate]

Where IF fee rate is the same for all collateral types (1.25%).

The liquidation flowchart for a trader with just ETH as collateral is displayed below:

If you have more than one non-USDC assets as collateral, the liquidator smart contract will determine which collateral will be liquidated with no specific order.

Bad Debt

If after a collateral liquidation a user has bad debt, they will actually pay that debt off when depositing more funds into the exchange.

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