# No Rehypothecation Core to Granite’s design is a commitment to security by not engaging in rehypothecation, a practice common in many DeFi platforms where borrowers’ collateral is lent out to generate additional yield. While rehypothecation can increase returns, it introduces significant liquidity risks for both borrowers and LPs. By avoiding rehypothecation, Granite ensures that users’ collateral remains fully reserved and readily available at all times, providing a higher level of predictability and transparency. This approach minimizes the risks associated with lending, offering borrowers peace of mind that their assets are not exposed to unforeseen risks or complications. Because Granite doesn’t rehypothecate collateral, it’s always available for withdrawal after loan repayment. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.granite.world/protocol-mechanics/no-rehypothecation.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.