Lending & Borrowing
The booming Crypto industry is often leaving investors with a serious dilemma. Selling their long-term assets to benefit of newest opportunities, or, holding patiently, therefore limiting the potential value gain offered by other markets. By borrowing, investors are now able to obtain liquidity (working capital) without selling their valued assets.
Users have the choice to participate as Depositors and/or Borrowers. Depositors are simply providing liquidity to the protocol in exchange for a passive income. As for the Borrowers, in order to obtain this working capital, they'll first have to provide by depositing a larger amount of liquidity than the intended withdrawal. (Overcollateralized)
Lending
Step 1:
Explore the different protocols in order the find the best protocol for your investment.
(In this demonstration, we'll use WETH as our selected asset)
C.F. : (Collateral factor) This is the maximum amount users can borrow in relation to their deposited asset. For Example, WETH’s CF is 70%. If you deposit 100 WETH, you can then borrow at most 70 WETH worth of another asset.
L.L.: (Liquidation limit) This is the maximum % your debt/collateral ratio is allowed to go. If this limit is exceeded, your collateral would be liquidated.
Deposit APY: This is the annual rate of return rewarded for your deposit. (compounded)
Borrow APY: For borrowing, the APY represents the yearly cost. (compounded)
: For both Deposit and Borrow, this value represents a reward offered as an incentive for users who participate in these markets.
Please note that Assets with 0% C.F. and L.L cannot be used as collateral in this specific protocol.
Step 2:
Once you found the market that suits you best :
- Click on Deposit.
- Input the amount that you want to lend to the protocol.
- Approve the transaction.
- Click on Deposit.
Borrowing
Step 3:
Once the transaction is fully completed, more details about your current investment will appear on your dashboard. You successfully lent your asset.
The following steps are for those who wish to borrow.
For this, you need to manually allow the asset to be used as collateral.
Within the same protocol, look for the asset that you want to borrow.
Step 4:
Once the borrowing asset is selected:
- Click on Borrow.
- Input the amount that you want to Borrow from the protocol.
- Approve the transaction.
- Click on Borrow.
Step 6:
In order to utilize CIAN at its fullest, you may now set up some tasks (Auto-borrow , Auto-repay , Flash repay) to automatically manage your loan. The system will:
- 1.Ensure that you won't get liquidated by automatically repaying some of your debt if the Loan/Collateral % goes up.
- 2.Optimize your lent asset by increasing your loan if the Loan/Collateral % goes down. Refer to Results and Performances for more data on the efficiency of this smart task.
Last modified 11mo ago