Loan borrow

After a user has locked up their collateral, they can borrow against it. The amount the user has borrowed of a given asset is defined as BtB_t​ whereas the borrow balance of a given asset BBtBB_t​ is defined as the amount borrowed plus accrued interest.

The borrow factor BFBF​ represents the effective borrowed amount given a borrow, in percent terms. For example, a more volatile asset may have BF=110BF=110​% (for $10 borrowed, it is as if $11 has been effectively borrowed) whereas a less volatile asset may have BF=100BF=100​%.

Consider a user who borrows multiple assets. The total borrowed amount TBtTB_t at time t for a given loan’s borrows is:



  • BBtBB_t denotes the current user borrow balance of a borrow,

  • PiP_i is the price of the borrowed asset,

  • BFiBF_i is the borrow factor,

  • the subscript ii represents each borrow of the loan where a borrow is a unique pairing of asset and variable/stable rate.

The total borrowed TBtTB_t must not exceed the borrowable amount BAtBA_t, otherwise the loan can be liquidated by a third party:

TBtβ©½BAtTB_t \leqslant BA_t

If a borrow or reduce collateral operation would lead to the above condition being violated then it will be rejected by the protocol.

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