“Collateral” is the quantity of cryptocurrencies that is within a Masternode pool and which composes the staking capacity of a pool.
In Kuailian, the collateral is composed of the amount of Kuais (software licenses) inside the Smart Pool. With the activation of a Kuai, the Ethereum are exchanged for tokens of different Masternodes within the Smart Pool. The collateral of each client is, therefore, a portfolio of different tokens (unspecified), and represents a percentage of the total Smart Pool value. With the expiration of a Kuai, the collateral is returned to the client. The collateral at the moment of liquidation is tied to the market value, which underlies strong volatility.