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.

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

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