# Optional Collateral Contracts

Wildcat allows for a borrower to deploy one or more smart contracts holding assets that can be liquidated and transferred in to a specific Wildcat market should capital calls (withdrawal requests) not be honoured in the appropriate time frame. The intention here is to offer lenders a mechanism by which they can underwrite a credit opportunity by referring to backing assets visible on-chain.

While the 'default' behaviour of Wildcat is that markets are under/uncollateralized depending on the [reserve ratio/CRR](/using-wildcat/terminology.md#reserve-ratio) set on creation, making use of collateral contracts permits a market to be partially, fully or even *over*collateralised, in *any* ERC20 asset provided that there is a path to convert them to the underlying (base) asset of a Wildcat market.

This is distinct from the concept of a borrower 'over-repaying' assets to a market itself (i.e. transferring 1,000 USDC to a market where they only have 900 USDC in outstanding debt) - collateral contracts are defined in assets that are *different* to the asset being borrowed, such as depositing Wrapped Ether (WETH) as a pledge against a USDC credit line.

In the current version of collateral contracts, the assets pledged within a collateral contract are not deployed further to, for example, yield farm: rather, they sit 'in stasis' until the earlier of:\
\
a) the market being terminated (all outstanding debt is repaid), whereupon the borrower can withdraw the assets from the collateral contract, or\
\
b) the market enters penalised delinquency, whereupon the appropriate amount can be liquidated by an approved executor address into the underlying asset of the market and repaid.

#### Using Collateral Contracts As A Borrower

<figure><img src="/files/v5MCVwPmHROXbHSTOU9w" alt=""><figcaption></figcaption></figure>

sdfsfd

<figure><img src="/files/IHVgV41yYgT0LwzgFZQy" alt=""><figcaption></figcaption></figure>

fsfsf

<figure><img src="/files/nRaje3rruizJJbJIfHGk" alt=""><figcaption></figcaption></figure>

dasdsdf

<figure><img src="/files/UGY4SawfcawzvH4OOC6O" alt=""><figcaption></figcaption></figure>

sdfasfd

<figure><img src="/files/QjeygmlYIGzFnHReUIOH" alt=""><figcaption></figcaption></figure>

sdfsdfs

<figure><img src="/files/xkukk386sFOjVE7HJjhy" alt=""><figcaption></figcaption></figure>

dsdsfs

<figure><img src="/files/mMVcRVyLvt2cAF9Ztc2O" alt=""><figcaption></figcaption></figure>

fsdfs

<figure><img src="/files/8HEZZbOVVcUF1ssNMQpp" alt=""><figcaption></figcaption></figure>

dasfsafda

<figure><img src="/files/y1U0D8AFfJdQaXwHTvqt" alt=""><figcaption></figcaption></figure>

#### Technical Details

todo


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.wildcat.finance/using-wildcat/day-to-day-usage/optional-collateral-contracts.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.