How does Borrowing Work

Borrowing against your crypto assets!

The Basics:

Supply Collateral -> Borrow Tokens & Get Bonus $LEND !

The ability to borrow crypto has never been more accessible, simple or transparent. LEND aims to achieve financial inclusion for everyone around the globe and providing value to users with zero barriers to entry. Any users who have supplied tokens to the protocol and allocated them as collateral are eligible to borrow. Borrowers can then efficiently access liquidity from the LEND protocol by using the borrow function.

How do I borrow?

The borrow function is only available to users who supply tokens to LEND AND allocate them to be used as collateral.

To be eligible to become a borrower users must first supply tokens to LEND to borrow against. To learn about the specifics of providing collateral read the dedicated section here!

What Happens When I borrow?

The Borrow function will transfer assets from the LEND protocol to the user and will create a borrow balance. which will begin to accumulate interest based on the borrow rate for that asset. The amount borrowed shall be less than the user’s account liquidity and the liquidity available in the market.

• Repay Borrow Full

  • When a user chooses to repay a borrow balance, they can simply use the repay borrow function, which will then transfer enough assets into the LEND protocol, and fulfilling a user’s borrow balance.

• Repay Borrow Partial

  • Users also have the option to repay a partial amount of an outstanding balance. This function will transfer the desired amount assets into the LEND protocol, and reduce the user’s borrow balance.

When a user borrows using a Lending Pool, they are required to provide collateral in excess to the borrowed amount. This is to cover their loan and to serve as first-loss capital to the Pools, aligning their interests with Lenders.

The amount of collateral required varies as the risk profile is managed by the TENtroller you can read about that here!

Liquidations

Any borrower that has their account equity go negative, will be subject to liquidation by other users of the LEND protocol in order to return the user account liquidity back to positive territory. It is a process in which liquidators choose to clear insufficiently collateralized debt in return for the assets supplied as collateral at a discounted price. This process is a necessity to protect and encourage a healthy lending ecosystem. To find out more about liquidations, see here:

🌊pageLiquidations