Collateral Vaults

Every pool has one vault for each of the accepted collateral types. Keeping the collateral in pools separated into vaults has the following implications:

• When a liquidity position is liquidated, its collateral and debt are distributed pro-rata across the other liquidity positions of the same collateral type in the pool (i.e., of the other positions in the vault), not across all positions in the pool.

• Entire vaults may be liquidated.

• Pool owners can attach rewards distributors to vaults, allowing them to incentivize liquidity of particular types to be added to their pools.