Borrower
A Borrower accesses capital from a Strategy Vault–powered lending market to deploy their own strategies or participate in markets. Borrowing capacity is derived from real strategy performance rather than interest rate extraction.
Borrowers do not pay interest.
1. Accessing a Lending Market
A Borrower begins by selecting a lending market associated with a specific Strategy Vault.
Each lending market displays:
Available borrowing capacity
Supported collateral assets
Loan-to-value (LTV) parameters
Liquidation thresholds
Strategy powering the market
Borrowing capacity is dynamically adjusted based on strategy performance.
2. Depositing Collateral
To borrow, the Borrower deposits supported collateral into the lending market.
Collateral:
Remains locked for the duration of the loan
Is subject to protocol-defined LTV and liquidation rules
Determines the maximum borrowable amount
Borrowers always know their liquidation risk upfront.
3. Borrowing Capital
Once collateral is deposited, the Borrower can borrow available capital from the lending market.
Key characteristics:
Zero interest is charged on borrowed amounts
Borrowed capital is funded by lender liquidity
Borrowing availability depends on current strategy performance
Borrowers are not exposed to strategy performance directly.
4. Loan Management
Borrowers monitor:
Collateral value
Current LTV
Liquidation threshold
Market conditions
If collateral value declines beyond allowed thresholds:
Positions may be liquidated
Borrowed principal is recovered by the lending pool
Losses are limited to the posted collateral
There is no debt accumulation beyond collateral value.
5. Repayment & Exit
Borrowers may repay borrowed capital at any time.
Upon repayment:
Principal is returned to the lending pool
Collateral is released back to the borrower
No interest or penalty accrues
If liquidation occurs:
Collateral is used to cover the loan
The borrower exits without residual debt
Last updated