Collateral Posting
How Protocols Use Haircuts to Accept Tokenized Assets
Collateral Posting is a product built on RAVA's VaR Oracle. It enables lending protocols to safely accept tokenized assets as collateral using the haircut output.
The Use Case
A lending protocol wants to accept tokenized assets as collateral. Without RAVA, they face two bad options:
- Refuse the asset:Too risky, no way to price it properly
- Accept at arbitrary discount:Hope for the best, risk insolvency
With RAVA, protocols consume the haircut from the VaR Oracle and use it to determine collateral value.
How It Works
Step 1: Protocol Integrates RAVA Oracle
The protocol queries RAVA's VaR Oracle for the asset's haircut:
Asset: Tokenized Private Credit Fund
NAV: $100M
Haircut: 35%
Step 2: Collateral Value Calculated
Collateral Value = NAV × (1 − Haircut)
$100M × (1 − 0.35) = $65M
Step 3: Lending Against Collateral
The protocol can now safely lend against this position:
| Metric | Value |
|---|---|
| Deposited NAV | $100M |
| Collateral Value | $65M |
| Max Loan (80% LTV) | $52M |
The borrower receives up to $52M USDC against their $100M private credit position.
Step 4: Continuous Monitoring
The haircut updates as market conditions change:
| Scenario | Haircut | Collateral Value | Max Loan |
|---|---|---|---|
| Normal markets | 35% | $65M | $52M |
| Credit spreads widen | 42% | $58M | $46M |
| Severe stress | 50% | $50M | $40M |
If the loan balance exceeds the new max, the protocol requests additional collateral or begins liquidation.
Why Haircut (Not Discount)?
Haircut is used for collateral because:
- It represents value under orderly conditions
- The position is still performing
- No forced exit is happening yet
Discount would overcollateralize:
- Using 42% discount when only 35% haircut is needed
- Destroys capital efficiency
- Unnecessary when settlement is proceeding normally
Traditional finance separates these for good reason. RAVA brings this discipline on-chain.
Integration Pattern
Protocols integrate RAVA's collateral values like any other oracle:
// Pseudocode
const haircut = ravaOracle.getHaircut(assetAddress);
const collateralValue = assetNAV * (1 - haircut);
const maxLoan = collateralValue * protocolLTV;The protocol sets its own LTV on top of RAVA's haircut. RAVA provides the risk-adjusted collateral value; the protocol decides how much to lend against it.
Comparison to Static LTV
| Aspect | Static LTV | RAVA Collateral Posting |
|---|---|---|
| Risk measurement | Fixed percentage | VaR-based haircut |
| Updates | Manual governance | Continuous |
| Asset-specific? | Broad categories | Per-asset |
| Responds to stress? | No | Yes |
| Capital efficient? | Often not | Yes |
Example: Protocol Integration
A lending protocol wants to accept three different assets:
| Asset | NAV | Haircut | Collateral Value |
|---|---|---|---|
| Tokenized T-Bills | $50M | 3% | $48.5M |
| Private Credit Fund | $100M | 35% | $65M |
| Real Estate Token | $30M | 22% | $23.4M |
Each asset gets appropriate risk treatment. The T-bills get tight haircuts because they're highly liquid. The private credit gets wider haircuts because of gating and redemption delays. The real estate falls in between.
Total collateral value: $136.9M:available for lending across the protocol.
What Happens If Something Goes Wrong
If a borrower defaults:
- Protocol attempts liquidation
- RAVA's discount (not haircut) determines execution price
- The gap between haircut and discount is absorbed by:
- The borrower's remaining equity
- Protocol safety funds
- RAVA's standing bid (if purchased)
The haircut was calibrated so that the discount loss is covered.
Benefits for Protocols
Risk management:Continuous, VaR-based collateral values Capital efficiency:Appropriate haircuts, not arbitrary discounts Composability:Standard interface across assets Transparency:Users see exactly how collateral is valued
Benefits for Users
Unlock liquidity:Borrow against previously unmarginable assets Fair treatment:Haircuts based on actual risk, not arbitrary rules Predictability:Know your collateral value in advance Hedge ability:Reduce haircut by hedging dynamic components