> For the complete documentation index, see [llms.txt](https://docs.snowbl.capital/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.snowbl.capital/how-it-works/overcollateralization.md).
# Collateralization
How Snowbl vaults maintain a surplus of assets to smooth out yield volatility and protect the share price.
Snowbl vaults hold more assets in value than what is reported to depositors. This surplus acts as a buffer that absorbs yield volatility and short-term valuation fluctuations.
Collateralization is continuously updated on the detailed vault view.
As a result, the share price of each vault remains stable and is not directly impacted by temporary swings in underlying yield or asset valuations. Only realized, confirmed gains are reflected in the share price over time.
This overcollateralization model ensures that depositors benefit from consistent, smoothed returns rather than being exposed to the noise of day-to-day market movements.
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