Coinbase International Exchange

How does cross collateral work?

Cross collateral allows Coinbase International Exchange clients to use alternative crypto assets like Bitcoin (BTC) and Ethereum (ETH) as collateral to support positions on perpetual futures markets. 

Will all of my crypto assets be counted as collateral?

What assets are accepted as collateral?

Currently, BTC and ETH can be used as collateral in addition to USDC. Support for additional assets may be added in the future.

Will all my BTC and ETH assets be counted as collateral?

There are limits on how much of an asset can be used as collateral across your organization (UBO). These limits are calculated as a percentage of the average daily quantity (ADQ) of the asset. Exceeding a limit means the excess collateral above the limit does not contribute to portfolio value 

Current limits are available via API titled “account_collateral_limit” 

How is my collateral valued?

The value of collateral is determined by the following process:

  1. Notional Value: Market value of the collateral asset, calculated based on its quantity and price in USDC.

  2. Collateral Value: Total value of assets that can be used as pledged collateral. The value is calculated by multiplying the notional value by the collateral weight. This contributes to the portfolio's total value for margin calculations

    • Collateral Weight: Multiplier used to assess the actual value of assets used as collateral after accounting for a collateral haircut and is calculated as (1 - Collateral Haircut)

    • Collateral Haircut: Percentage reduction applied to the market value of an asset that is used as collateral 

    • When calculating collateral weight, two types of haircuts are considered, with the greater of the two being applied to determine collateral value:

      • Base Haircut: a static percentage assigned to each asset

      • Closeout Horizon Haircut: adjusted according to the amount of asset pledged

    • Current Collateral Weight are available via API titled “collateral_weight”

Can my collateral be liquidated?

Yes, collateral liquidations are automatic processes to address funding shortfalls or margin coverage issues. The proceeds are used before resorting to closing any positions.

Collateral liquidation is triggered in scenarios to reduce risk at the point where the portfolio’s current margin drops below maintenance margin.

Helpful API documentation