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What is the difference between making a deposit available as collateral or not?
I know that in order to borrow money, you need to provide collateral. However, I am wondering if there is any difference in making a deposit available as collateral or not, if I am not planning on borrowing anything. Does it affect my account in any way? Can someone explain the implications of making a deposit available as collateral versus not doing so?
- Aave Protocol
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1It only makes a difference if you were borrowing. You might not want to mark a certain asset as collateral when borrowing so if you were liquidated then that asset would not be liquidated.
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Aave is a decentralized non-custodial liquidity protocol where users can participate as depositors or borrowers.
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