Partial Collateral Swap (Flexible Position Management)
Helios introduces a Partial Collateral Swap that lets borrowers exchange a portion of their locked collateral for another supported asset without closing or refinancing the loan. This capability is rare in today’s lending markets and is made possible by Helios’s programmable custody on Bitcoin.
1. Workflow Without Helios
To rebalance collateral in most platforms, a borrower must:
Repay the full loan.
Withdraw the entire collateral.
Swap off-platform into a new asset.
Re-deposit and borrow again.
This four-step process incurs multiple network fees, market-spread slippage, and often constitutes a taxable disposal of the original asset.
2. Helios One-Step Swap
With Helios, the borrower submits a single on-chain instruction. For example, when function call corresponding to below instruction is executed:
The protocol atomically converts the specified slice of collateral to the target asset.
The LTV is re-evaluated in the same transaction; the loan remains open and uninterrupted.
Result: the wallet now shows 0.50 BTC + X USDT as collateral, all executed inside the vault.
3. Key Benefits
Volatility control
Shift part of the collateral into a stablecoin ahead of a projected BTC draw-down, lowering liquidation risk without exiting the position.
Tax optimization
By rebalancing inside the loan, a borrower could defer recognizing capital gains that would normally arise from an outright sale of appreciated BTC. (Always consult a tax advisor; treatment varies by jurisdiction.)
Treasury agility
Corporate desks can fine-tune collateral composition intraday—e.g., dial down BTC exposure before quarterly close—while preserving the original borrowing terms.
Cross-asset opportunities
Move collateral into whichever asset currently carries the lower risk weight or higher borrow demand, maximizing capital efficiency.
4. Safety Checks
Real-time LTV validation – The swap executes only if the post-trade collateral value satisfies all risk parameters.
Single-transaction atomicity – Either the swap completes with the position healthy, or it reverts with no state change.
Helios’s Partial Collateral Swap delivers portfolio-level control, potential tax advantages, and operational simplicity—features that traditional DeFi money markets and even many CeFi desks do not yet offer.
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