# Collateral

### USDC

Traders put up USDC (Circle's digital US dollar) as their collateral for trades, and LPs invest USDC into our market-making vaults. 

We use Circle's USDC as our stablecoin of choice, as it is one of the world's largest stablecoins with a proven and safe track record, and a stablecoin that is available on several exchanges around the world (while being readily available on both Optimism and Base). It is very easy for a trader to swap out their stablecoin into USDC within our app.  We did not want to create our own stablecoin, use a less capital efficient stablecoin like DAI, or use a partially regulated stablecoin like Tether.

Learn more about USDC from Circle, the company that creates USDC.

<figure><img src="https://1312337203-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F76vAZHPcNKY10NzuKsC4%2Fuploads%2FCZq6fXLEBIEJNKaueZae%2FScreen%20Shot%202023-04-02%20at%207.04.47%20PM.png?alt=media&#x26;token=490f8d82-d524-404f-8442-092e42ab516f" alt=""><figcaption></figcaption></figure>