Delegating Collateral

Providing liquidity to pools involves two function calls, deposit and delegateCollateral. deposit transfers collateral to the Synthetix Core address and associates it with the relevant account. delegateCollateral assigns the collateral to a pool, creating or updating a liquidity position.

deposit and withdraw increase and decrease the amount of available collateral associated with an account. delegateCollateral will increase/decrease the amount of available collateral by altering the amount provided to a specified pool. These functions may be called together using the multicall function, so end users need to only execute one transaction.

When delegating, the position size must be greater than a minimum amount, specified by governance per collateral type. This generally serves as the liquidation reward for the position.

There are a few scenarios in which collateral may not have its delegation reduced or be withdrawn:

• Delegated collateral may only be reduced if the liquidity position’s resulting C-Ratio is greater than the Issuance C-Ratio for its collateral type. In other words, liquidity providers can only retrieve their collateral if they pay off their debt.

• Delegated collateral may not be reduced if the resulting credit capacity for any of the markets connected to the pool would drop below the market's minimum credit value.
• Delegated collateral may not be adjusted unless the minimum collateral delegation duration has elapsed since the last time delegateCollateral was called pertaining to this liquidity position. This is a mechanism which allows markets to mitigate the risk of active liquidity providers front-running market activity.

• Available collateral may not be withdrawn unless the globally configured withdraw timeout has elapsed since this account has last been interacted with. This is a global system safety parameter which may eventually be set to 0 via SCCP.

The types of collateral which are accepted by the protocol are configured globally by governance. Enabling, disabling, or changing the settings pertaining to collateral may be proposed via SCCP. Retrieve information about the currently accepted collateral types with the getCollateralConfigurations function.