> For the complete documentation index, see [llms.txt](https://docs.alphafi.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.alphafi.xyz/old-doc/introduction/how-it-works.md). # How it works ## Borrow and Lend, Seamlessly AlphaLend enables users to supply assets and earn passive yield while unlocking borrowing power — all on the SUI blockchain. When you deposit supported assets, you earn interest from borrowers, and your tokens can be used as collateral to borrow other assets in return. ## Overcollateralized, By Design All loans on our platform are overcollateralized. This means borrowers must deposit assets worth more than the value they borrow, ensuring the protocol remains solvent even in volatile market conditions. Each token has specific Loan-to-Value (LTV) ratios, guiding how much you can borrow safely. ## Real-Time Risk Monitoring Our system calculates your borrow and supply balances using real-time price data from decentralized oracles like Pyth. These values feed into a dynamic **health factor**, which is visualized in a simple risk bar — helping you monitor how close your position is to liquidation. ## Smart Risk Controls Borrowing beyond your **Safe Borrow Limit** is automatically blocked to protect your position. Liquidations only occur when your debt surpasses the **Liquidation Limit**, at which point third-party liquidators can step in to stabilize the system. This layered safety net ensures responsible borrowing and lending. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation by asking a question. Perform an HTTP GET request on the following URL with the `ask` and `goal` query parameters: ``` GET https://docs.alphafi.xyz/old-doc/introduction/how-it-works.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is what the user is ultimately trying to achieve, the reason they need the answer. Sharing it helps GitBook give you a better, more relevant answer. A goal is most helpful when it describes the outcome the user wants rather than restating the question. For example, with `ask=how do I create an API token`, a goal like `automate deployments from our CI pipeline` lets GitBook tailor the answer to that use case. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.