What is Collateral?

The easiest way to think of collateral is as both a safety measure for interacting with applications connected to the Cardano blockchain, but also as something which makes complex transactions much smoother.

Interacting with decentralised applications - websites like which empower you to use the Cardano network more easily - are very technical products as I am sure you can imagine. So a small amount of ADA, usually 5ADA, is set aside to make that process safer and also smoother.

How to add Collateral.

Collateral is set inside your chrome extension wallet. If you have not set one up yet this needs to be done first. If you need help we have an article just for setting up a new Cardano wallet!

How to add collateral depends on the wallet type you are connected with. Most can be set very simply either in the Account or Settings of the chrome extension. Once you find the section for collateral - this is easiest in Nami and Flint wallet - adding the collateral will require one transaction. The ADA you set aside is recoverable at any time.

You cannot set collateral from inside It must be done inside your wallet application.

Last updated