Skip to main content

Collateral custody

When you deposit positions as collateral, the protocol holds those ERC1155 tokens in the on-chain core contract. You can withdraw them as long as your account remains healthy. This is fully non-custodial — no one, including the Varla team, can access, freeze, or redirect your funds. All custody rules are enforced purely by on-chain smart contracts:
  • You can withdraw whenever on-chain health checks allow
  • No off-chain operator can freeze your withdrawals
  • The team has no “admin key” to move user funds

Lender funds

Lender deposits live in the ERC4626 pool contract. Withdrawals are limited by available liquidity (funds that are currently not borrowed).

Debt + repayments

Borrower debt is tracked in VarlaCore as scaled debt. Repayments move the underlying ERC20 from the borrower to Core and then to the Pool.