The Collateral Investor AMO moves idle USDC collateral to select DeFi protocols that provide reliable yield. Currently, the integrated protocols include: Aave, Compound, and Yearn. More can be added by governance. The main requirement for this AMO is to be able to pull out invested collateral immediately with no waiting period in case of large FRAX redemptions. Collateral that is invested with an instant withdrawal ability does not count as lowering the CR of the protocol since it is spontaneously available to the protocol at all times. Nevertheless, the decollateralize function in the specs pulls out invested collateral starting with any time-delayed withdrawals (which there are none currently and not planned to be as of now).
Any investment revenue generated that places the protocol above the CR is burned with FXS1559.