DIVA Protocol
  • 👋Welcome
  • 🔅Introduction
    • Derivative contracts
    • What is DIVA Protocol
      • What problem does it solve
      • How it works
        • Reference assets
        • Payoff curves
        • Collateral
        • Oracles
        • Settlement
          • Timelines
          • Challenge
          • Status
          • Fast settlement
          • Fallback data provider
        • Fees
        • Compliance feature
      • Vision
      • Terminology
    • What is DIVA Token
      • Owner election mechanism
      • Token distribution
    • DIVA Development Fund
    • FAQ
  • 🌈DIVA App
    • What is DIVA App
    • Overview
    • Create position tokens
    • Trade position tokens
    • Add liquidity
    • Remove liquidity
  • ⚙️Guides
    • DIVA App Training
      • Prepare
      • Testnet
      • Create
      • Trade
      • Add
      • Remove
      • Settle
      • Redeem
      • Fees
    • Quiz
  • 🪄Use cases
    • Overview
    • Insurance
      • Credit default protection
      • Agrarian insurance
      • DeFi Hack insurance
      • Peg insurance
    • Yield optimization
      • Bullish accumulation
      • Bearish accumulation
    • Risk management
      • Downside protection
      • Increasing cost protection
    • Directional bets
      • Downside bet
      • "Bottom-Is-In" bet
      • Upside bet
      • "Top-Is-In" bet
    • Leverage
  • 👨‍🎓Pricing derivatives
    • Introduction
    • Underlying value
    • Volatility
    • Time
  • ⚓Oracle integrations
    • Overview
    • Tellor
  • ⚒️For developers
    • Overview
    • Technical resources
    • Smart contracts
      • Functions
        • Core protocol functions
        • Getter functions
        • Setter functions
        • ABI
      • Contract addresses
      • Example scripts
    • TheGraph
      • DIVA subgraphs
      • Whitelist subgraph
    • Project ideas
  • 📱Contact & Media Links
    • Social media
  • 👨‍🎓Technical Blog
    • Flash loans in DIVA Protocol
    • NDVI outcome reporting guide for Tellor Reporters
    • Enabling capital efficiency in DeFi
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  1. Introduction
  2. What is DIVA Protocol
  3. How it works

Collateral

Choose a wide range of ERC20 tokens as collateral

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Last updated 1 year ago

In DIVA Protocol, collateral refers to the asset that is deposited into a contingent pool to back the value of the position tokens. The protocol offers support for a wide range of ERC20 tokens to serve as collateral, including popular options like DAI, USDC, USDT, WBTC, WETH, as well as interest-bearing tokens such as or wrapped staked ETH ().

To qualify as collateral, an ERC20 token must meet the following criteria:

  • Decimal precision: The token's decimal precision must be between 6 and 18.

  • No transfer fees: The token must not charge fees on transfers. This will result in a transaction revert when creating a pool. If transfer fees are activated after a pool has been created, adding liquidity will no longer be possible. It is important to highlight that the pool can still be settled.

  • Non-rebasable: The token's balance in a holder's wallet should remain constant. That is, tokens like Ampleforth, Lido's (non-wrapped) staked ETH (), or , which can alter the holder's balance, should not be used as collateral to prevent rendering a pool undercollateralized or locking any accrued yield/interest. When tokens with a flexible supply are considered as collateral, only tokens with a constant balance mechanism such as or the wrapped version of Lido's staked ETH () should be used. It's important to highlight that, unlike fee-on-transfer tokens, using rebasable tokens as collateral will NOT cause a transaction revert when creating a pool or adding liquidity.

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Compound's cDAI
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stETH
Aave's aTokens
Compound's cToken
wstETH