Swapping out the collateral backing an existing loan for a different asset without liquidating the position or requiring repayment first — letting a borrower proactively adjust their risk exposure instead of passively waiting for <a href="/en/glossary/derivatives-and-leverage/liquidation/">Liquidation</a> to happen.

When the value borrowed against <a href="https://crypto-bible.com/en/glossary/defi-basics/stablecoin/" target="_blank" rel="noopener">Stablecoin</a> collateral breaches a safety threshold, the protocol auto-auctions the collateral to repay the debt, and the borrower forfeits a <a href="/en/glossary/derivatives-and-leverage/liquidation/">Liquidation</a> penalty in the process.

A pool on a decentralized exchange holding two or more stablecoins, letting traders swap between them with minimal slippage while liquidity providers earn trading fees — the design trades on the assumption that prices barely move, in exchange for higher capital efficiency.

Handing off the actual investing to an automated <a href="/en/glossary/blockchain-fundamentals/smart-contract/">Smart Contract</a> that follows a pre-written strategy to allocate your stablecoins across multiple protocols and automatically reinvest for compounding — you don't need to manually manage anything day to day, but you also hand off the judgment of "is this strategy any good" to whoever designed the vault.