Collar is a decentralized finance (DeFi) borrowing solution that utilizes a Prepaid Variable Forward agreement, allowing borrowers to cap their potential upside while eliminating liquidation risk. By leveraging market makers to provide collateral, Collar enables users to borrow against any asset with industry-leading loan-to-value ratios and zero counterparty risk.
Funding
$2.5M raised to dateRaised to date based on public sources. This may differ from the amount the company actually raised and is based only on what is publicly available on the internet.
Founders
Product
Problem
Traditional decentralized finance (DeFi) lending platforms rely on liquidation mechanisms that can force borrowers to sell collateral at unfavorable prices during market downturns. This creates significant risk for borrowers, especially those seeking to leverage volatile assets. Existing platforms may also have limitations on the types of assets that can be used as collateral.
Solution
Collar is a DeFi borrowing solution that utilizes a Prepaid Variable Forward agreement to eliminate liquidation risk for borrowers. Instead of liquidating collateral, Collar caps the potential upside for borrowers, providing a predictable borrowing experience. Market makers provide collateral, enabling users to borrow against a wider range of assets with high loan-to-value (LTV) ratios. This approach removes counterparty risk and allows for borrowing against assets that may not be supported on traditional lending platforms.
Target Audience
Collar's primary users are DeFi borrowers seeking to leverage their assets without the risk of liquidation, as well as market makers looking to profit from hedging volatility.
Features
- Prepaid Variable Forward agreement that caps upside and eliminates liquidation risk
- Market maker-provided collateral for asset-agnostic borrowing
- Industry-leading loan-to-value (LTV) ratios
- Time-based, not price-based, borrowing terms
- Fully collateralized positions with no counterparty risk
- Hedged collateral upfront to mitigate downside risk
- Swaps collateral to user's chosen liability token (typically stables)