# PMM Credit ### What is PMM credit? Credit is required when private market makers facilitate credit-based swaps within the **Native Swap Engine**. For each token swap, a Private Market Maker (**PMM**) is effectively longing the input token that the user provides while simultaneously shorting the output token that is borrowed from **Native Credit Pool** and subsequently distributed to users. Consequently, in this process, credit is required to bridge the gap between the long and short positions. For instance, if a PMM is longing 3,000 USDC while shorting 1 WETH, with the price of WETH at 3600 USD, the PMM must maintain an additional 600 USD in collateral to ensure that the credit remains positive. ### How to calculate credit? The available credits for the PMM will be computed using: `Credit = longPositionUsd - shortPositionUsd + collateralUsd` **Note:** `longPositionUsd` and `collateralUsd` are subject to collateral factors which varies between tokens. More details [here](/native-dev/concepts/credit-based-swap/collateral-factor.md). ### Collaterals **PMM**s contribute liquidity in the form of base tokens to the Native credit pools, such as USDC, USDT, WETH, and WBTC. Upon the locking the Liquidity Provider (**LP**) tokens, these liquid asset deposits are transformed into collateral which subsequently contributes to the total available credits. For instance, a **PMM** may deposit and secure 1 USDT in the Credit Pools, with the collateral factor of 90% resulting in 0.9 USD being added to the pool of available credits. ### Long Positions Furthermore, assets held in long positions also contribute credits. For example, should a **PMM** maintain a long position of 1 USDC, with the collateral factor being 80%, then 0.8 USD would similarly be added to the available credits. --- # 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/pmm-credit.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.