↪ How to Borrow from HyperLend
• Why Borrow Instead of Selling Your Assets?
↝ Advantages of Borrowing
Liquidity: Borrowing provides liquidity (working capital) without selling your assets.
Asset Appreciation: By keeping your assets, you can still benefit from any potential increase in their value.
Financial Flexibility: Users typically borrow for unexpected expenses, leveraging holdings, or pursuing new investment opportunities.
• How to Borrow
↝ Steps to Borrow
Supply any asset to be used as collateral (refer to the "Supplying & Earning" section for more information).
Navigate to the "Borrow" section and select the asset you wish to borrow.
Set the desired amount based on your available collateral.
Choose either a stable or variable interest rate and confirm the transaction.
You can switch between stable and variable rates anytime.
↝ Borrowing Limits
The maximum borrow amount depends on the value of your supplied assets and the available liquidity.
You cannot borrow more than the available liquidity or beyond what your health factor allows.
Check the risk parameters section for details on collateral requirements and specific borrowing limits.
↝ Repayment Details
Loans must be repaid in the same asset that was borrowed. For example, if you borrow 1 ETH, you repay 1 ETH plus any accrued interest.
You can also repay with stablecoins such as USDC, DAI, or USDT if you prefer to repay based on USD value.
↝ Interest Rate Types
Stable Rate: Acts as a fixed rate in the short term but can be rebalanced in the long term. It provides more predictable interest costs.
Variable Rate: Fluctuates based on market conditions and the supply-demand ratio for the asset. This rate can change over time.
↝ Switching Interest Rates
To switch between stable and variable rates, go to your dashboard and use the "APR Type" switch for the relevant asset.
↝ Interest Payment
Interest rates are derived from the supply-demand ratio of the asset.
Variable rates change constantly, while stable rates provide more predictable costs.
You can view your current borrowing rate in the Borrowings section of your dashboard.
↝ Health Factor
The health factor measures the safety of your deposited assets against your borrowed assets.
A higher health factor indicates a safer position.
If the health factor drops to 1 or below, liquidation of your deposits may occur.
Detailed information on collateral parameters and health factor calculations can be found in the risk parameters section.
↝ Impact of Health Factor Changes
Fluctuations in the value of your supplied assets will affect your health factor.
An increased health factor improves your borrow position, reducing liquidation risk.
A decreased health factor increases the risk of liquidation.
• Loan Repayment
When to Repay
There is no fixed period for loan repayment. You can borrow for an indefinite period as long as your position remains safe.
Over time, accrued interest will reduce your health factor, potentially increasing the risk of liquidation.
How to Repay
Go to the Borrowings section of your dashboard and select the repay option for the borrowed asset.
Choose the amount to repay and confirm the transaction.
• Avoiding Liquidation
↝ Strategies to Prevent Liquidation
Repay the loan to improve your health factor.
Deposit more assets to increase your collateral value.
By following these guidelines, you can manage your borrowings effectively on HyperLend, ensuring liquidity while maintaining the potential for asset value appreciation.Why Borrow Instead of Selling Your Assets?
Last updated
