Borrow
Last updated
Last updated
Go to the "Markets" page and navigate to the "Borrow Market" section.
Select the asset class you wish to borrow by clicking on it
In the opening dialogue, enter the desired amount to borrow and click "Borrow"
Once the transaction is confirmed, the borrow is successful and it starts accruing payable interest
Loans need to be overcollateralised, and a Borrow Limit is thus required.
Because users remain pseudo-anonymous, they could otherwise be tempted to never pay back the loan and lending protocols would be bleeding money.
The Borrow Limit is the $ amount of assets a user is able to borrow. It is based on the value of their supplied assets and their combined maximum Loan-to-Value ratios.
Once the Borrow Limit is reached, the liquidity of the account is deemed at zero, and the user cannot borrow more.
If the collateral value rises, the user can borrow more.
If the collateral value falls or the interest accrued on their borrowed balance outgrows the liquidation threshold, then the collateral is at risk of liquidation.
Borrow Limit Used is the amount of liquidity that an account has used, stated as a percentage and based on the value of the assets they currently have provided and their combined Loan-to-Value rates.
Borrow Limit Used is simply an expression of the amount of liquidity that an account has used but stated as a percentage and based on the value of the assets they currently have provided and their combined Loan-to-Value.
The Collateral Factor varies for each asset class. It is the maximum amount that can be borrowed from the protocol using this specific asset as collateral.
