FAQ

Questions and answers for borrowers.

How much collateral should I supply?

The value of required collateral depends on the following parameters:

• CF (Collateral Factor) parameter of the asset you supply (see Asset parameters)

• LT (Liquidation Threshold) parameter of the asset you borrow

• MAC (Minimum Account Health when borrowing) = 1%

For example, if you provide PUZZLE with CF = 40% and want to borrow 1000 XTN which has LT = 95%, you should provide PUZZLE worth: 1000 / ((1 – MAC) × CF × LT) = 1000 / (0.99 × 0.4 × 0.95) ≈ 2658 XTN.

How much interest will I owe?

The interested rate owed on borrowed loans is not constant, it is calculated dynamically depending on the supply and demand ratio of the asset.

For more information see theBorrow APY section.

When do I have to pay the loan back?

There is no specific date by which a loan must be repaid. However, your debt increases each block. The longer you use the loan, the greater the interest you will owe.

What if my collateral becomes insufficient?

Although you provide sufficient collateral at the time of the borrowing, the situation may change:

• Supplied collateral may decline in value

• Borrowed assets may increase in value

• Your debt position may grow due to accrued interest

If the value of your collateral dips below a threshold, your loan will be partially liquidated and a liquidation penalty will be automatically deducted from your collateral.

Ensure your Account Health stays high by repaying the loan or supply more collateral if needed to avoid the liquidation.