In Cardano, collateral is a feature designed to ensure smart contracts execute successfully. Collateral is used to guarantee that nodes are always compensated for their work and as long as your collateral is never consumed (the chance of this is rare) you can withdraw it at any time.

In this guide, we will walkthrough how to set collateral in your wallet. In this demonstration, we will be using Nami wallet—but, you can set collateral on all other non-custodial wallets such as Gero, ccvault, and Yoroi.

How to set collateral in Nami Wallet

To start, if you would like a complete video walkthrough of this entire process and more, check out this video by one of our Cardano community members, Jack, detailing how to set up Nami from start to end.

1. Click on your profile picture in the top right corner

2. Once you see the drop down menu, click on "Collateral"

3. A pop-up window will appear, prompting you to set 5 ADA as your collateral. This ADA is retrievable at any time, unless it's consumed in some rare occasions. Enter in your wallet password and click confirm.

Now, your collateral is set! You should be able to interact with all features of the SundaeSwap DEX flawlessly, as well as other features found in other dApps. If transactions are failing, you may consider resetting your collateral.

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