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 β whereas the borrow balance of a given asset β is defined as the amount borrowed plus accrued interest.
The borrow factor β represents the effective borrowed amount given a borrow, in percent terms. For example, a more volatile asset may have β% (for $10 borrowed, it is as if $11 has been effectively borrowed) whereas a less volatile asset may have β%.
Consider a user who borrows multiple assets. The total borrowed amount at time t for a given loanβs borrows is:
Where:
denotes the current user borrow balance of a borrow,
is the price of the borrowed asset,
is the borrow factor,
the subscript represents each borrow of the loan where a borrow is a unique pairing of asset and variable/stable rate.
The total borrowed must not exceed the borrowable amount , otherwise the loan can be liquidated by a third party:
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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