# Collateral Factor It is important to note that credits are in USD, computed based on the number of balances and USD prices. Additionally, each asset will be assigned a collateral factor, which is also used in this calculation. Each collateral asset is associated with a distinct collateral factor, which indicates the proportion of USD value that collateral or long positions contribute to the credit. In the example above, this factor is set at 100% for simplicity. In actuality, this factor is generally lower than 100% and is subject to adjustments based on: * USD pegged assets, for example: USDT, USDC Highest collateral factor * Large cap, blue chip assets, for example: WBTC, WETH Medium to high collateral factor * Long-tail assets Low to no collateral factor For instance, if USDT possesses a collateral factor of 90%, WBTC has a collateral factor of 80%, TOKEN1 is at 5%, and TOKEN2 stands at 0%, then a long position of each token will contribute 90 USD, 80 USD, 5 USD, and 0 USD to the credit, respectively, based on their corresponding collateral factors. --- # 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.native.org/native-dev/concepts/credit-based-swap/collateral-factor.md?ask= ``` 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.