Borrow & Repay
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.
Before borrowing you need to supply any asset. After this, simply head to the Borrow section and click on “Borrow” for the asset you want to borrow.
The maximum amount you can borrow depends on the value you have supplied and the available liquidity. For example, you can’t borrow an asset if there is not enough liquidity or if your borrowing capacity doesn’t allow you to. You can find every collateral available and its specific parameters for borrowing in the risk parameters section.
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.
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 [Borrow] section of your dashboard.
There is no fixed time period to pay back the loan. As long as your position is safe, you can borrow for an undefined period. However, as time passes, the accrued interest will grow making your current LTV increase, which might result in your supplied assets becoming more likely to be liquidated.
In order to payback the loan you simply go to [Borrow] section of your dashboard and click on the repay button for the asset you borrowed and want to repay. Select the amount to pay back and confirm the transaction.
In order to avoid liquidation, you can repay the loan or supply more assets.