Borrow

Supplierd tokens may be used as collateral to borrow from the same silo.

Collateralization

Borrowers may take out a loan up to their collateral's maximum LTV. They are required to pay interest to lenders based on their loan amount and the current interest rate.

Loans are represented by a non-transferrable ERC-20 token. The loan value increases over time relative to the interest accrued, meaning more underlying is required to settle a loan.

Repayment

Borrowers can repay their loans fully or in part at any time. To fully withdraw their collateral, the entire loan must be fully repaid.

Upon repayment, some or all of the user's debt token is burned to clear the borrower's loan balance.

Liquidation

If a borrower's current Loan-to-Value (LTV) exceeds the Liquidation Threshold (LT), their position will be signaled for liquidation.

When this occurs, part or all of the borrower's collateral is seized and sold to repay their loan while the borrower may keep their borrowed funds. Liquidators receive a liquidation fee for their service.