> For the complete documentation index, see [llms.txt](https://docs.grace.loans/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.grace.loans/grace/collateral-value-limits.md). # Collateral value limits A maximum global deposit limit is set for each collateral in dollar terms. As soon as the limit is reached, whether due to new deposits or a rise in the price of existing deposits, no more deposits can be made. More importantly, when the limit is reached, the oracle price of each unit of collateral is also limited in order to preserve the global collateral value limit based on the deposited number of collateral tokens. This mechanism functions regardless of oracle price, meaning that it is able to control collateral exposure even in the event of oracle price manipulation. Thanks to collateral value limits, cross-margin pools are no longer as strong as their weakest collateral. Exposure to each collateral can be limited without reducing the collateral’s efficiency. When collateral value limits are combined with fair loss distribution, lenders are able to make much more precise risk/reward calculations. They know how much they can expect to lose due to exposure to each collateral vs how much they can expect to earn based on the current interest rate and collateral fees. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.grace.loans/grace/collateral-value-limits.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.