> ## Documentation Index
> Fetch the complete documentation index at: https://docs.theblockchainlibrary.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Collateral Factor

> A lending-protocol parameter determining how much borrowing power a supplied asset contributes relative to its market value.

# Collateral Factor

A lending-protocol parameter determining how much borrowing power a supplied asset contributes relative to its market value.

## Definition

A lending-protocol parameter determining how much borrowing power a supplied asset contributes relative to its market value.

## Why it matters

DeFi concepts explain blockchain-based markets, lending, trading, liquidity, and financial automation.

## Related knowledge

* [Smart Contract](/generated/v2/glossary/smart-contract) — term

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**Canonical knowledge ID:** `glossary:collateral-factor`