Collateral
Tokens posted as security against an action and returned when the action completes. Collateral is held, not spent. It backs a position or a session and comes back to the owner once the obligation clears.
Also known as: bond, security deposit, posted stake
Collateral is value you post to back an obligation, held by a contract or counterparty and returned to you once the obligation is met. The defining feature is that collateral is held rather than spent. It sits locked for the life of the position and comes back when you close out, minus anything you owe. This separates it from a payment, which leaves your wallet for good, and from a pure stake-for-yield, where the lock is about earning rather than securing a specific action.
In DeFi the classic case is a lending position: you deposit one asset as collateral, borrow against it, and reclaim the deposit when you repay. If the position goes bad, the collateral can be liquidated to cover the debt. The amount you can borrow against a given deposit (the collateralisation ratio) is one of the core risk parameters in any lending protocol.
The pattern shows up in inference markets too. On Morpheus, opening a staked inference session pulls the user’s MOR into the contract as collateral, holds it while the model runs, and returns it in full at session close. The provider is paid separately from a protocol funding account, so the user’s collateral is security for the session, not the source of the provider’s pay. Reading “staked, not spent” correctly depends on spotting that the MOR is collateral.
Whenever a mechanism says tokens are “staked” or “locked,” it’s worth asking which job the lock is doing. Collateral secures an action and returns. An escrow holds under a release condition. A burn destroys the tokens. The three get described in similar language and behave completely differently when you want your tokens back.