Concepts

Supplying Assets

When you supply assets into the protocol, you start earning interest instantly. These assets are pooled and made available for others to borrow.

Your deposits also serve as collateral, which allows you to borrow other assets if needed.

Borrowing Assets

You can borrow supported tokens by using your supplied assets as collateral.

Each token has a Loan-to-Value (LTV) ratio, which determines how much you can borrow against it.

Example:

If you deposit $1,000 USDC and the LTV is 75%, you can borrow up to $750 of another token.

You can repay any time to reduce interest or unlock more of your collateral.

Loan-to-Value Ratio

LTV is the maximum percentage of your supplied asset’s value that you can borrow.

Different tokens have different LTVs, based on their risk level and volatility.

Example:

• USDC may have 75% LTV → borrow up to $750 worth of asset on a $1,000 USDC deposit

• More volatile assets usually have lower LTVs

Interest Rates

Interest rates adjust automatically based on supply and demand. When more users are borrowing an asset, the borrow rate increases — and suppliers earn more. When demand is low, rates decrease. As a supplier, you earn interest; as a borrower, you pay it. Rates update in real-time to keep the system balanced.

Liquidation Threshold

The Liquidation Threshold marks the point at which your borrowed position becomes undercollateralized. This is calculated based on a weighted average of the risk parameters of your supplied assets. If your borrow balance exceeds this limit, a portion of your collateral is liquidated to repay part of the debt.

Liquidation Bonus

When liquidators step in to stabilize undercollateralized positions, they are rewarded with a 3% bonus on the portion they liquidate. This incentive keeps the protocol secure by encouraging timely interventions when users fall below the liquidation threshold.