If not all the collateral value is taken into account and it runs the risk of liquidation, why would I use cross-collateralization?
Last updated October 16, 2025
Cross-collateralization is useful for many reasons, but there are two very big use cases:
- accrue yield while trading: if you deposit a yield bearing token into your margin account, that token will still be accruing yield even while you are using it to trade!
- boost capital efficiency and reduce liquidation risk: for example, the PnL of an asset is (approximately) matched by the price variations of that asset. Using that asset as collateral will then minimize value fluctuations in your account, it being market neutral while accruing the funding rate.
Remember that perps still settle in rUSD! This means that the cross-collateralization can optimize your capital deployment, but you still need to carefully manage your rUSD balance to avoid collateral liquidations.
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