# Collateral Wrappers Collateral wrappers allow a Pool to recognize collateral that exists in a wrapped form for a loan. This facility is useful for implementing a number of extensions to the Pool, such as bundles and airdrop receivers. Collateral wrappers are implemented as an ERC721 token that the Pool takes custody of instead of the native collateral token for a loan. Collateral wrappers implement the [`ICollateralWrapper`](https://github.com/metastreet-labs/metastreet-contracts-v2/blob/master/contracts/interfaces/ICollateralWrapper.sol) interface, which allows a Pool to enumerate the underlying collateral for validation with its collateral filter, and allows a collateral liquidator to unwrap the underlying collateral for liquidation. The two official collateral wrappers are the [`BundleCollateralWrapper`](https://github.com/metastreet-labs/metastreet-contracts-v2/blob/master/contracts/wrappers/BundleCollateralWrapper.sol), which can be used to create reusable collateral bundles, and the [`ERC1155CollateralWrapper`](https://github.com/metastreet-labs/metastreet-contracts-v2/blob/master/contracts/wrappers/ERC1155CollateralWrapper.sol), which gives Pools indirect support for ERC1155 collateral with loans. Pools may recognize up to five collateral wrapper contracts, which are bound to the Pool implementation contract at deployment time. --- # 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.metastreet.xyz/technical-overview/protocol-design/collateral-wrappers.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.