> For the complete documentation index, see [llms.txt](https://docs.vibe.trading/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.vibe.trading/trading/collateral-and-margining.md).

# Collateral & Margining

## Collateral

**USDC Deposits**

All trades require USDC deposits as collateral, ensuring traders have sufficient funds to cover potential losses. Solvers also deposit equivalent USDC for symmetry. Settlements occur in USDC.

**Credit Valuation Adjustment (CVA)**

CVA is a penalty applied during liquidation, paid to the non-liquidated party. It incentivizes both sides to maintain balanced positions and serves as a form of liquidation insurance.

## Cross-Margin

By default, Vibe uses cross-margin accounts:

* Capital Efficiency: Your entire portfolio (USDC balance plus open trades) backs multiple positions.
* Risk Offset: Gains on one position can offset losses on another.

Total Account Liquidation Risk: If your overall equity falls below the maintenance margin, all positions are liquidated.

## Isolated Margin

VibeCaps now uses isolated margin through virtual accounts. A virtual account is an isolated margin bucket connected to a position, market, or market direction depending on the account’s isolation settings.

This means margin assigned to one isolated position is separate from the rest of your account balance. If that position is liquidated, it cannot drain margin from another isolated virtual account.

You can also manage margin on an open position. Adding margin increases the collateral buffer and moves the liquidation price farther away. Removing margin frees balance, but moves liquidation price closer and increases liquidation risk.