Borrow

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Opening a Borrow Position

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Step 1: Choose Your Collateral Source

When opening a borrow position, you can use collateral from:

• Your Positions: Collateral currently deposited
• Your Wallet: Assets already deposited in your Savings (account 0)

Using Savings as collateral allows you to borrow without withdrawing your deposits first.

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Step 2: Open a Borrow Position

1. Navigate to the Borrow section
2. Select a collateral-debt pair (e.g., ETH collateral → USDC debt)

3. Choose your collateral source from your wallet
4. Enter the amount you want to borrow

5. Review the position details:
   • Initial health score
   • Liquidation price
   • Interest rates
6. Confirm the transaction

Note: The transaction may use batching to atomically supply collateral and borrow in a single step, ensuring safety and gas efficiency. The borrowed amount will be transferred to your wallet, and you’ll start accruing interest on the debt. Your position will be created in a new sub-account for isolation.

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Step 3: Monitor Health Score

Your health score indicates how close you are to liquidation. Keep it above 1.0 to stay safe:

• Health Score > 1.0: Safe
• Health Score = 1.0: At liquidation threshold
• Health Score < 1.0: Can be liquidated

Always monitor your health score and keep it well above 1.0 to avoid liquidation risk.

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Repaying Debt

1. Navigate to your borrowed position
2. Click “Repay”
3. Enter the amount to repay (or select “Max” to repay all)
4. Review the updated health score after repayment
5. Confirm the transaction

You can repay partially or fully at any time. Repaying debt improves your health score and reduces liquidation risk. Tip: You can batch repay and withdraw operations together using the EVC for gas efficiency.

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Withdrawing Collateral from Borrow Positions

1. Navigate to your borrowed position
2. Click “Withdraw Collateral”
3. Enter the amount to withdraw
4. Review the updated health score—ensure it stays above 1.0
5. Confirm the transaction

Note: You can only withdraw if your health score remains above the liquidation threshold (1.0) after the withdrawal. The interface will prevent withdrawals that would make your position unsafe. Tip: Use batching to withdraw collateral and repay debt in a single transaction for efficiency.

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Managing Your Borrow Position

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Health Score Best Practices

• Monitor Regularly: Check your health score frequently, especially during volatile market conditions
• Maintain Buffer: Keep your health score well above 1.0 (aim for 1.5+ for safety)
• Set Alerts: Use monitoring tools to alert you when your health score approaches dangerous levels
• Understand Liquidation Price: Know the price at which your position becomes liquidatable

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Risk Management

• Diversify Collateral: Don’t put all your collateral in one asset
• Watch Correlations: Be aware of asset correlations—correlated assets increase risk
• Monitor Liquidity: Ensure there’s sufficient liquidity in the market for your collateral
• Position Isolation: Use sub-accounts to isolate different strategies

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Related Guides

• Lend - Learn how to lend assets to earn yield
• Liquidations - Learn about liquidation mechanics
• EVC and Sub-accounts - Advanced features for power users
• Risk Management - Best practices for managing risk