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Adding Collateral

Deposit tokens from your wallet to a credit account to increase its health factor and enable borrowing.

Why

You need to add collateral when:

  • Opening an account - Initial deposit to enable borrowing
  • Improving health factor - Account approaching liquidation threshold
  • Enabling more borrowing - Current collateral limits how much you can borrow

Adding collateral increases your account's total weighted value (TWV), which improves the health factor and allows larger debt positions.

What

addCollateral transfers tokens from your wallet to the Credit Account. On execution:

  1. The Credit Manager calls transferFrom to move tokens from caller to Credit Account
  2. The token is enabled as collateral (if not already enabled)
  3. Quoted tokens are NOT auto-enabled - you must set a quota separately

Important: Approve tokens to the Credit Manager, not the Credit Facade. The Credit Manager is the contract that actually executes the transfer.

How

TypeScript
import { GearboxSDK, createCreditAccountService } from '@gearbox-protocol/sdk';

const sdk = await GearboxSDK.attach({ client, marketConfigurators: [] });
const service = createCreditAccountService(sdk, 310);

// Build the multicall
const calls = [
  service.prepareAddCollateral(usdcAddress, 10_000n * 10n ** 6n),
];

// First, approve to Credit Manager (not Facade!)
const market = sdk.marketRegister.findByCreditManager(cmAddress);
await usdcContract.write.approve([
  market.creditManager.address,
  10_000n * 10n ** 6n,
]);

// Execute on existing account
await market.creditFacade.write.multicall([creditAccountAddress, calls]);

// Or open new account with collateral
await market.creditFacade.write.openCreditAccount([
  ownerAddress,
  calls,
  0n, // referralCode
]);

Using Permit (No Separate Approval)

For EIP-2612 compatible tokens, you can avoid the separate approval transaction:

TypeScript
import { encodeFunctionData } from 'viem';
import { iCreditFacadeV300MulticallAbi } from '@gearbox-protocol/sdk';

// Sign permit message (details depend on your wallet setup)
const { v, r, s, deadline } = await signPermit(/* ... */);

const calls = [
  {
    target: creditFacadeAddress,
    callData: encodeFunctionData({
      abi: iCreditFacadeV300MulticallAbi,
      functionName: 'addCollateralWithPermit',
      args: [tokenAddress, amount, deadline, v, r, s],
    }),
  },
];

Gotchas

Approve to Credit Manager, Not Facade

The most common mistake. The Credit Manager executes the transferFrom, so it needs the approval:

TypeScript
// CORRECT
await token.write.approve([creditManager.address, amount]);

// WRONG - will fail
await token.write.approve([creditFacade.address, amount]);

Quoted Tokens Need Quota

Adding a quoted token as collateral does NOT automatically enable it. You must also call updateQuota:

TypeScript
const calls = [
  service.prepareAddCollateral(quotedTokenAddress, amount),
  service.prepareUpdateQuota(quotedTokenAddress, quotaAmount, minQuota),
];

Direct Transfers Don't Enable

Sending tokens directly to a Credit Account (via transfer) does NOT enable them as collateral. You still need a multicall with enableToken to count them in the health factor.

Invalid Collateral Tokens

Only tokens recognized by the Credit Manager can be used as collateral. Transferring unrecognized tokens to a Credit Account may result in them being stuck (only governance can recover).

Check if a token is valid:

TypeScript
// This reverts if token is not valid collateral
const mask = await creditManager.read.getTokenMaskOrRevert([tokenAddress]);

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