# Explain Like I'm 5

# Why Collar

Collar is for those scenarios where you have a big expense or need liquidity and you don't want to sell your crypto to pay for it.

If you want to buy a new token, LP in uniswap for a bit, buy a car, make a down payment on a house, or post margin somewhere else in DeFi, Collar helps you access liquidity without fully giving up your exposure.

Even better, with our supplier mode upgrade (under construction), in some jurisdictions (not tax advice) this could allow borrowers to get cash without triggering a taxable event.

Keep your exposure, borrow against your crypto, and don't worry if the price tanks for a couple months because you have time to post collateral, liquidate something else, or hope crypto prices go back up before you have to face the loss.

# The Wealth Management META

Buy, borrow, die.

# But what if it moons?

If prices go up, roll! Rolling is like a checkpoint in a video game you can always fall back to. Think of it like going up the salmon ladder. There's certainly a cost to rolling, but there's a bigger cost to not having protection.

# The Collar Difference

The key difference between Collar and other liquidation-driven protocols is that normally, you'd have to watch prices all the time and make sure you don't get margin-called / liquidated. Now, you can sleep at night knowing that if prices tank you don't have to sell your stuff into a market that has no buyers.

# What Collar Solves

You know those big "liquidation cascades" when everyone's getting margin called? Collar fixes that, reducing volatility in the space for everyone.

# The Inflation Tailwind

One last thing... what happens if you borrow a million dollars and the money supply doubles? You owe LESS! Sure it's the same number of dollars, but hey, dollars are cheaper now. In an inflationary world, debt is the META (most effective tactics available).