> For the complete documentation index, see [llms.txt](https://docs.btcd.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.btcd.fi/the-vaults/why-sbtcd-is-structurally-better-collateral.md).

# Why sBTCD Is Structurally Better Collateral

sBTCD has $$\omega=0.5$$ — it is a "half-beta" instrument. Compared to using wBTC as collateral against a USD loan to manufacture BTC-leveraged exposure, sBTCD-backed positions have:

* Higher safe LTV at equivalent liquidation risk, because the collateral is half-correlated with the debt asset.
* Less frequent rebalancing required for a given price move.
* Lower variance drag on the position's yield.

This structural property is one of the reasons the vaults can deliver competitive yields with relatively conservative leverage.

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