Borrowing

Why would I borrow instead of selling my assets?

Selling your assets means closing your position on that particular asset. Hence, if you are long on the asset, you would not be entitled to the potential upside value gain.

By borrowing you are able to obtain liquidity (working capital) without selling your assets. Users are mainly borrowing for unexpected expenses, leveraging their holdings or for new investment opportunities.

How do I borrow?

Before borrowing you need to deposit any asset to be used as collateral. After this, simply head to the Borrow section and click on “Borrow” for the asset you want to borrow. Set the amount you need based on your available deposits that would be used as a collateral for the loan. The following assets will be available to use as collateral to start with :

ETH, wBTC, USDC, USDT and GRAIL.

How much can I borrow?

The maximum amount you can borrow depends on the value you have deposited and the available liquidity.

For example, you can’t borrow an asset if there is not enough liquidity or if your health factor doesn’t allow you to. You can find every collateral available and its specific parameters for borrowing in the risk parameters section.

What asset do I need to repay?

You repay your loan in the same asset you borrowed. For example, if you borrow 1 ETH you will pay back 1 ETH + interest accrued. If you want to pay back the loan based on USD price you can borrow any of the available stablecoins.

How much would I pay in interest?

The interest rate you pay for borrowing assets depends on the borrowing rate which is derived from the supply and demand ratio of the asset. You can find your current borrowing rate at any time in the Borrowings section of the dashboard.