{
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  "id": "collateral-swaps",
  "canonical": "https://degreesofsatoshi.com/encyclopedia/collateral-swaps/",
  "collection": "defi",
  "title": "Collateral swaps: replacing backing while keeping a loan open",
  "description": "Explain replacing the asset backing a loan and why equal market value can still produce a different borrowing risk.",
  "aliases": [
    "Aave collateral swap how works",
    "change collateral without closing borrowing"
  ],
  "dates": {
    "published": "2026-10-02",
    "modified": "2026-10-02",
    "verified": "2026-10-02T19:18:00.092Z",
    "dataAsOf": "2026-10-02"
  },
  "authorship": {
    "publisher": "Degrees of Satoshi editorial project",
    "process": "AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied."
  },
  "quickAnswer": {
    "text": "A collateral swap replaces one supplied asset with another while coordinating the lending position’s constraints. Aave’s documented swap adapter can combine swapping and re-supply in one transaction, with or without a flash-loan path. Equal market value does not imply equal borrowing power because assets can have different eligibility and risk parameters.",
    "claimId": "collateral-swaps-quick-answer",
    "sourceIds": [
      "x425-defi-aave-swaps",
      "x425-defi-aave-collateral"
    ]
  },
  "keyFacts": [
    {
      "label": "Replacement",
      "value": "The adapter swaps supplied assets and supplies the result.",
      "sourceIds": [
        "x425-defi-aave-swaps"
      ],
      "id": "replacement",
      "claimId": "collateral-swaps-fact-replacement"
    },
    {
      "label": "Output bound",
      "value": "The documented methods include a minimum amount to receive.",
      "sourceIds": [
        "x425-defi-aave-swaps"
      ],
      "id": "output-bound",
      "claimId": "collateral-swaps-fact-output-bound"
    },
    {
      "label": "Risk parameters",
      "value": "Collateral LTV and liquidation thresholds can differ.",
      "sourceIds": [
        "x425-defi-aave-collateral"
      ],
      "id": "risk-parameters",
      "claimId": "collateral-swaps-fact-risk-parameters"
    }
  ],
  "prerequisites": [
    "collateral-and-health-factors"
  ],
  "sections": [
    {
      "id": "example",
      "heading": "Compare adjusted collateral value",
      "sourceIds": [
        "x425-defi-aave-health",
        "x425-defi-aave-collateral"
      ],
      "paragraphs": [
        "Suppose 1,000 of asset A has an 80% liquidation threshold and supports 600 debt. Health factor is about 1.33. Replacing it with 1,000 of asset B at a hypothetical 70% threshold gives 700 / 600 ≈ 1.17 before costs.",
        "Receiving the same market value did not preserve the same margin of safety. Slippage reducing the output value makes the distinction larger."
      ]
    },
    {
      "id": "atomic",
      "heading": "Temporary health can matter",
      "sourceIds": [
        "x425-defi-aave-swaps"
      ],
      "paragraphs": [
        "A manual withdrawal followed by a later deposit may be impossible while the first asset backs debt. The documented adapter coordinates replacement and checks; a flash loan can support the temporary sequence. Where a non-flash path is permitted, its preconditions differ."
      ]
    },
    {
      "id": "category",
      "heading": "Confirm that the new asset counts",
      "sourceIds": [
        "x425-defi-aave-emode",
        "x425-defi-aave-swaps"
      ],
      "paragraphs": [
        "The destination asset must be valid for the selected market and collateral configuration. Review category borrowing permissions, minimum output, approvals and final health factor. A completed token swap that leaves the new asset outside the relevant collateral category may not achieve the intended borrowing arrangement."
      ]
    }
  ],
  "faq": [
    {
      "question": "Does swapping collateral change the asset I owe?",
      "answer": "A collateral swap changes the supplied side. Changing the debt asset is a separate refinancing operation.",
      "sourceIds": [
        "x425-defi-aave-swaps"
      ]
    }
  ],
  "claims": [
    {
      "id": "collateral-swaps-quick-answer",
      "articleSlug": "collateral-swaps",
      "statement": "A collateral swap replaces one supplied asset with another while coordinating the lending position’s constraints. Aave’s documented swap adapter can combine swapping and re-supply in one transaction, with or without a flash-loan path. Equal market value does not imply equal borrowing power because assets can have different eligibility and risk parameters.",
      "sourceIds": [
        "source-f84decea4c02489e",
        "source-a679a4dc85247e88"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-f84decea4c02489e",
          "locator": "Repay with collateral; Collateral Swap; Debt Swap"
        },
        {
          "sourceId": "source-a679a4dc85247e88",
          "locator": "Enable; Disable; health factor"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T19:18:00.092Z",
        "reviewer": "Independent automated verification — Codex root, separate from the DeFi drafting agent",
        "notes": [
          "Checked Aave collateral swap adapter min-output and re-supply;800/600≈1.33 versus700/600≈1.17 with different thresholds."
        ]
      }
    },
    {
      "id": "collateral-swaps-fact-replacement",
      "articleSlug": "collateral-swaps",
      "statement": "Replacement: The adapter swaps supplied assets and supplies the result.",
      "sourceIds": [
        "source-f84decea4c02489e"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-f84decea4c02489e",
          "locator": "Repay with collateral; Collateral Swap; Debt Swap"
        }
      ],
      "scope": {
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        "dataAsOf": "2026-10-02",
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      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
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        "checkedAt": "2026-10-02T19:18:00.092Z",
        "reviewer": "Independent automated verification — Codex root, separate from the DeFi drafting agent",
        "notes": [
          "Checked Aave collateral swap adapter min-output and re-supply;800/600≈1.33 versus700/600≈1.17 with different thresholds."
        ]
      }
    },
    {
      "id": "collateral-swaps-fact-output-bound",
      "articleSlug": "collateral-swaps",
      "statement": "Output bound: The documented methods include a minimum amount to receive.",
      "sourceIds": [
        "source-f84decea4c02489e"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-f84decea4c02489e",
          "locator": "Repay with collateral; Collateral Swap; Debt Swap"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T19:18:00.092Z",
        "reviewer": "Independent automated verification — Codex root, separate from the DeFi drafting agent",
        "notes": [
          "Checked Aave collateral swap adapter min-output and re-supply;800/600≈1.33 versus700/600≈1.17 with different thresholds."
        ]
      }
    },
    {
      "id": "collateral-swaps-fact-risk-parameters",
      "articleSlug": "collateral-swaps",
      "statement": "Risk parameters: Collateral LTV and liquidation thresholds can differ.",
      "sourceIds": [
        "source-a679a4dc85247e88"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-a679a4dc85247e88",
          "locator": "Enable; Disable; health factor"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
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      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T19:18:00.092Z",
        "reviewer": "Independent automated verification — Codex root, separate from the DeFi drafting agent",
        "notes": [
          "Checked Aave collateral swap adapter min-output and re-supply;800/600≈1.33 versus700/600≈1.17 with different thresholds."
        ]
      }
    }
  ],
  "sources": [
    {
      "id": "x425-defi-aave-swaps",
      "label": "Aave v3 Swap Features",
      "publisher": "Aave",
      "url": "https://aave.com/docs/aave-v3/smart-contracts/swap-features",
      "locator": "Repay with collateral; Collateral Swap; Debt Swap",
      "note": "Documented adapter/flash-loan/DEX composition; availability varies by market.",
      "version": "Documentation retrieved for the 2026-10-02 editorial scope; content hash recorded",
      "checkedAt": "2026-10-02T18:53:21.663Z",
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      "recordId": "source-f84decea4c02489e"
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    {
      "id": "x425-defi-aave-collateral",
      "label": "Toggle Collateral Status",
      "publisher": "Aave",
      "url": "https://aave.com/help/supplying/toggle-collateral-status",
      "locator": "Enable; Disable; health factor",
      "note": "Changing collateral status independently of supply balance.",
      "version": "Documentation retrieved for the 2026-10-02 editorial scope; content hash recorded",
      "checkedAt": "2026-10-02T18:53:21.565Z",
      "contentSha256": "e34879a19b7b44b55651f157424f33a750b2b0fa29ece983917cbb6ab83b9ce2",
      "recordId": "source-a679a4dc85247e88"
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    {
      "id": "x425-defi-aave-health",
      "label": "Health Factor and Liquidations",
      "publisher": "Aave",
      "url": "https://aave.com/help/borrowing/liquidations",
      "locator": "Health Factor; Managing Health Factor",
      "note": "Weighted liquidation thresholds; no universal safe ratio.",
      "version": "Documentation retrieved for the 2026-10-02 editorial scope; content hash recorded",
      "checkedAt": "2026-10-02T18:53:21.960Z",
      "contentSha256": "30c991765c763cc1bc7665de9fdf6603c969677068261beca7dfb11eb85018f4",
      "recordId": "source-74f79d59daaab5f0"
    },
    {
      "id": "x425-defi-aave-emode",
      "label": "Efficiency Mode",
      "publisher": "Aave",
      "url": "https://aave.com/help/borrowing/e-mode",
      "locator": "Categories; correlated assets; risks",
      "note": "Higher capital efficiency under category assumptions.",
      "version": "Documentation retrieved for the 2026-10-02 editorial scope; content hash recorded",
      "checkedAt": "2026-10-02T18:53:21.760Z",
      "contentSha256": "05936f508560f64ecb0257f8239b79d2e450d5344973cd908f48840f74d0af0b",
      "recordId": "source-8037b70863bfb264"
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  ],
  "related": {
    "articles": [
      "defi-debt-refinancing",
      "aave-efficiency-mode",
      "repay-with-collateral"
    ],
    "dossiers": [],
    "wallets": []
  },
  "revisionHistory": [
    {
      "date": "2026-10-02",
      "kind": "published",
      "summary": "First publication after primary-source research and separate automated verification."
    }
  ],
  "citation": "Degrees of Satoshi editorial project. “Collateral swaps: replacing backing while keeping a loan open.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/collateral-swaps/"
}