Isolated Collateral Market

The Isolated Collateral Market in Solera is designed to facilitate lending and borrowing through 1:1 asset pools, where a specific collateral asset is paired with one or more borrowing assets. This market structure is ideal for onboarding longer-tail assets—those that may not have the liquidity or risk profile to be included in the Main Collateral Market.

By creating distinct, asset-specific pools, the Isolated Collateral Market allows Solera to expand its support for a broader range of tokens, offering more lending opportunities while containing risk within each pool. Typically, these markets feature higher interest rates for lenders, reflecting the unique risk and liquidity characteristics of these assets.

As with the Main Collateral Market, liquidations in Isolated Collateral Markets are standard and permissionless, conducted through decentralized exchanges (DEXs). This ensures a transparent and efficient liquidation process, helping to protect lenders and maintain market stability.