{
  "$schema": "https://degreesofsatoshi.com/encyclopedia/schemas/article-v1.json",
  "schemaVersion": "1.0.0",
  "id": "toggle-lending-collateral",
  "canonical": "https://degreesofsatoshi.com/encyclopedia/toggle-lending-collateral/",
  "collection": "defi",
  "title": "Turning collateral on or off: supply balance is not borrowing power",
  "description": "Separate supplying an asset from enabling it as borrowing collateral, and understand why disabling it can be blocked.",
  "aliases": [
    "disable collateral Aave meaning",
    "disable Aave collateral with active debt"
  ],
  "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 toggle changes whether a supplied asset counts toward borrowing capacity. It does not itself withdraw the asset or repay debt. In Aave V3, disabling collateral is subject to the remaining position’s health constraints, so an asset supporting an outstanding loan cannot always be switched off immediately.",
    "claimId": "toggle-lending-collateral-quick-answer",
    "sourceIds": [
      "x425-defi-aave-collateral",
      "x425-defi-aave-pool"
    ]
  },
  "keyFacts": [
    {
      "label": "Separate status",
      "value": "Supply balance and collateral eligibility are distinct.",
      "sourceIds": [
        "x425-defi-aave-collateral"
      ],
      "id": "separate-status",
      "claimId": "toggle-lending-collateral-fact-separate-status"
    },
    {
      "label": "Borrowing power",
      "value": "LTV and liquidation threshold govern different constraints.",
      "sourceIds": [
        "x425-defi-aave-collateral"
      ],
      "id": "borrowing-power",
      "claimId": "toggle-lending-collateral-fact-borrowing-power"
    },
    {
      "label": "Validation",
      "value": "The Pool validates a collateral-status change.",
      "sourceIds": [
        "x425-defi-aave-pool"
      ],
      "id": "validation",
      "claimId": "toggle-lending-collateral-fact-validation"
    }
  ],
  "prerequisites": [
    "collateral-and-health-factors"
  ],
  "sections": [
    {
      "id": "example",
      "heading": "Recalculate the backing that remains",
      "sourceIds": [
        "x425-defi-aave-health",
        "x425-defi-aave-collateral"
      ],
      "paragraphs": [
        "Imagine eligible collateral A has value 1,000 and B has value 500, both with a hypothetical 80% liquidation threshold. Against debt of 900, health factor is 1,200 / 900 ≈ 1.33. If B stops counting, it would become 800 / 900 ≈ 0.89.",
        "That desired state is below one. Disabling B is therefore not a harmless display preference in this example."
      ]
    },
    {
      "id": "distinction",
      "heading": "Do not confuse off with out",
      "sourceIds": [
        "x425-defi-aave-pool",
        "x425-defi-aave-collateral"
      ],
      "paragraphs": [
        "Switching collateral status concerns backing for debt. It leaves the supplied asset in the protocol unless a separate withdrawal occurs. Conversely, an asset visible in supplies might not be eligible collateral in the active category or configuration."
      ]
    },
    {
      "id": "change",
      "heading": "Read the post-action state before confirmation",
      "sourceIds": [
        "x425-defi-aave-collateral",
        "x425-defi-aave-emode"
      ],
      "paragraphs": [
        "Inspect debt, eligible assets and category-specific parameters after the proposed change. Repayment can reduce the need for backing, while a category change can alter which supplied assets count. The dashboard’s proposed health factor is a useful calculation to verify, not a guarantee against subsequent price changes."
      ]
    }
  ],
  "faq": [
    {
      "question": "Will turning collateral off cancel my outstanding borrowing?",
      "answer": "No. Debt persists until repayment or another protocol debt-resolution action.",
      "sourceIds": [
        "x425-defi-aave-collateral",
        "x425-defi-aave-pool"
      ]
    }
  ],
  "claims": [
    {
      "id": "toggle-lending-collateral-quick-answer",
      "articleSlug": "toggle-lending-collateral",
      "statement": "A collateral toggle changes whether a supplied asset counts toward borrowing capacity. It does not itself withdraw the asset or repay debt. In Aave V3, disabling collateral is subject to the remaining position’s health constraints, so an asset supporting an outstanding loan cannot always be switched off immediately.",
      "sourceIds": [
        "source-a679a4dc85247e88",
        "source-b35859a766315ce4"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-a679a4dc85247e88",
          "locator": "Enable; Disable; health factor"
        },
        {
          "sourceId": "source-b35859a766315ce4",
          "locator": "repay; setUserUseReserveAsCollateral; withdraw; setUserEMode"
        }
      ],
      "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 collateral toggle is not withdrawal or debt repayment;1200/900≈1.33 and800/900≈.89 after disabling B."
        ]
      }
    },
    {
      "id": "toggle-lending-collateral-fact-separate-status",
      "articleSlug": "toggle-lending-collateral",
      "statement": "Separate status: Supply balance and collateral eligibility are distinct.",
      "sourceIds": [
        "source-a679a4dc85247e88"
      ],
      "sourceLocators": [
        {
          "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 collateral toggle is not withdrawal or debt repayment;1200/900≈1.33 and800/900≈.89 after disabling B."
        ]
      }
    },
    {
      "id": "toggle-lending-collateral-fact-borrowing-power",
      "articleSlug": "toggle-lending-collateral",
      "statement": "Borrowing power: LTV and liquidation threshold govern different constraints.",
      "sourceIds": [
        "source-a679a4dc85247e88"
      ],
      "sourceLocators": [
        {
          "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 collateral toggle is not withdrawal or debt repayment;1200/900≈1.33 and800/900≈.89 after disabling B."
        ]
      }
    },
    {
      "id": "toggle-lending-collateral-fact-validation",
      "articleSlug": "toggle-lending-collateral",
      "statement": "Validation: The Pool validates a collateral-status change.",
      "sourceIds": [
        "source-b35859a766315ce4"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-b35859a766315ce4",
          "locator": "repay; setUserUseReserveAsCollateral; withdraw; setUserEMode"
        }
      ],
      "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 collateral toggle is not withdrawal or debt repayment;1200/900≈1.33 and800/900≈.89 after disabling B."
        ]
      }
    }
  ],
  "sources": [
    {
      "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"
    },
    {
      "id": "x425-defi-aave-pool",
      "label": "Aave v3 Pool",
      "publisher": "Aave",
      "url": "https://aave.com/docs/aave-v3/smart-contracts/pool",
      "locator": "repay; setUserUseReserveAsCollateral; withdraw; setUserEMode",
      "note": "Specific v3 write-method constraints and amount sentinel.",
      "version": "Documentation retrieved for the 2026-10-02 editorial scope; content hash recorded",
      "checkedAt": "2026-10-02T18:53:21.762Z",
      "contentSha256": "fb2828e86231a1280760fef675f3ee83825f32543b79c8c8529050e8da3281a3",
      "recordId": "source-b35859a766315ce4"
    },
    {
      "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"
    }
  ],
  "related": {
    "articles": [
      "withdraw-lending-supply",
      "aave-efficiency-mode",
      "repay-defi-loan"
    ],
    "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. “Turning collateral on or off: supply balance is not borrowing power.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/toggle-lending-collateral/"
}