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  • GENERAL
    • Protocol Overview
      • Optimizing Borrowing Rates
      • Actively Managing Idle Capital
      • How do users interact with a vault?
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    • The ALTI Token
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      • What are the advantages of using Altitude?
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      • What Oracles is Altitude using to determine the health of the vault?
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      • How are yields generated?
      • How do my rewards change when I interact with the vault?
      • Who determines where unutilized assets are deployed?
      • How will Altitude work at times of high volatility?
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  1. GENERAL
  2. Protocol Overview

Actively Managing Idle Capital

PreviousOptimizing Borrowing RatesNextHow do users interact with a vault?

Last updated 1 month ago

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Dormant Capital is the amount of your collateral that is not actively used to secure a loan, typically this amount is used to shield the loan from price fluctuations in the value of users’ collateral.

For example if a user is using ETH as collateral and is borrowing USDC they can typically borrow around 80% of their collateral value in USDC. However as the value of ETH will fluctuate the user will not want to borrow close to the maximum amount, so may borrow 30% of their collateral value instead. The difference between your theoretical maximum loan (80% Loan-To-Value) and your actual loan (30% Loan-To-Value) we call Dormant Capital.

Altitude automatically activates part of this Dormant Capital to generate yield on behalf of its users. Yield earned is automatically used to repay part of users’ debt.