Sell a CDS

TLDR

To sell a CDS, a user is required to deposit collateral into the chosen pool. This deposited collateral becomes available to potential buyers. Once a buyer fulfills the necessary premium payment, the available collateral is proportionally locked across all active CDS positions. At this point, the seller of the CDS can proceed to claim their premium.

It's crucial to understand that the locked collateral cannot be withdrawn by the seller until the loan reaches its maturity date. However, if the loan defaults, the seller risks losing any collateral that has been locked.