> For the complete documentation index, see [llms.txt](https://docs.keikofinance.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.keikofinance.com/keiko-token-information/keiko-v2/collateral-strategies.md).

# Collateral Strategies

### What Are Collateral Strategies?

**Collateral Strategies** let you earn yield on your vault collateral while keeping your borrowed USDK. Instead of having all your collateral sit idle, you can deploy a portion to earn interest on platforms like Hyperlend or HypurrFi.

**Key benefit:** Your collateral continues to back your borrowed USDK while simultaneously earning yield.

***

### How It Works

#### Your Collateral is Split Into Two Parts

When you use Collateral Strategies, your collateral is divided:

1. **Direct Collateral** - Stays in your vault for security (can't be deployed)
2. **Deployable Collateral** - Extra collateral you can send to earn yield

**Example:**

* You have 2 BTC in your vault ($100,000 value)
* You've borrowed $50,000 USDK
* The protocol requires you keep at least 1.3 BTC directly in the vault for safety
* **You can deploy up to 0.7 BTC** to earn yield while your debt stays the same

#### Why Keep Direct Collateral?

The protocol enforces a **Safety Buffer** (default: 20% above the liquidation threshold) to protect your vault:

* **Prevents liquidation** if deployed strategies temporarily can't return funds
* **Maintains healthy vault** even during market volatility
* **Keeps your borrowing power** intact

#### Yield Sources

You can choose from multiple vetted DeFi protocols:

* **Hyperlend V3** - Lending protocol
* **HypurrFi** - Lending protocol
* More options added over time

Each protocol has different yields and risks. Choose based on your preference.

***

### Safety Features

#### Automatic Protection

If your vault becomes unsafe due to price movements or other factors, the protocol has built-in protection:

**Safety Monitors** - Automated bots (keepers) monitor all vaults 24/7. If your direct collateral falls below the safety threshold, keepers can trigger an automatic withdrawal from your yield strategies to protect your vault.

**Small Fee** - If a keeper needs to rescue your vault, they receive a small fee (0.5% default) from the withdrawn amount. This incentivizes them to keep the protocol safe.

**You Stay Safe** - Even if you're not actively monitoring, your vault won't get liquidated due to deployed collateral.

#### What Happens During Emergency Withdrawals

1. System detects your direct collateral is too low
2. Keeper triggers withdrawal from your yield strategies
3. Collateral is returned to your vault
4. A small fee goes to the keeper
5. Your vault is safe again

**Note:** You can always withdraw your collateral yourself before keepers need to intervene.

***

### How to Use Collateral Strategies

#### Deploying Collateral

1. **Check Available Amount** - The interface shows how much you can deploy
2. **Choose a Strategy** - Select from available yield sources (Hyperlend, HypurrFi, etc.)
3. **Enter Amount** - Deploy up to your available limit
4. **Confirm** - Your collateral starts earning yield immediately

Your total collateral value doesn't change - it's just split between direct (in vault) and deployed (earning yield).

#### Withdrawing Collateral

You can withdraw your deployed collateral anytime:

1. **Click Withdraw** - From your vault's strategy section
2. **Confirm** - The system retrieves from all strategies automatically
3. **Receive** - Collateral plus any earned yield returns to your vault

**Note:** Withdrawals are usually instant, but may occasionally have small delays depending on the external protocol's liquidity.

#### Claiming Yield

Instead of withdrawing everything, you can claim just the yield earned:

1. **Check Earned Yield** - Displayed in your vault interface
2. **Click Claim Yield** - Keeps your principal deployed
3. **Receive** - Yield is added to your vault collateral

This increases your collateral without interrupting your yield strategy.