Borrowing

Why would I borrow instead of selling my assets?

Selling your assets means you're closing your position and missing out on potential gains if the price rises. Borrowing through Haust Lend lets you unlock liquidity (working capital) without selling your assets. This is great for handling unexpected expenses, leveraging your holdings or jumping into new investment opportunities without liquidating your portfolio.

How do I borrow?

First, you need to supply any asset to be used as collateral (check the Supplying & Earning FAQ for more details). Then, head to the Borrow section, select the asset you want and click "Borrow." Set the amount based on your available collateral value, choose between a stable or variable interest rate and confirm the transaction. You can always switch rates later if needed.

How much can I borrow?

The amount you can borrow depends on how much you've supplied and the available liquidity in the protocol. For example, you can’t borrow if there isn’t enough liquidity or if your health factor is too low. Check the risk parameters section for details on each type of collateral and its specific parameters for borrowing.

What asset do I need to repay?

You repay your loan in the same asset you borrowed. So, if you borrow 1 WETH, you'll need to repay 1 WETH plus any interest accrued. If you prefer to pay back based on USD value, you can borrow stablecoins like USDC or USDT.

What’s the difference between stable and variable rates?

Stable rates act like fixed rates in the short term but may adjust in the long run based on market shifts. Variable rates, however, fluctuate with supply and demand. Stable rates provide consistency, making it easier to predict how much interest you'll have to pay. Variable rates might be lower depending on market conditions, but they change over time. You can switch between the two anytime on your dashboard.

When could my stable rate be rebalanced?

Haust Lend can rebalance stable rates under certain conditions to prevent a large percentage of liquidity from being borrowed at rates below the market variable rate. The exact rebalancing rules depend on the protocol version you're using.

How do I switch my interest rate type?

To change between stable and variable rates, go to your dashboard, find the asset you want to adjust and hit the "APR Type" switch button.

How much will I pay in interest?

Your borrowing interest rate depends on the supply-demand ratio of the asset. Variable rates fluctuate constantly, while stable rates provide more predictability. You can always check your current borrowing rate in the Borrowings section of your dashboard.

What is the health factor?

The health factor is a number that shows how safe your deposits are against the borrowed assets and its underlying value. The higher the health factor, the safer your position. If your health factor drops to 1, your collateral may be liquidated. If it falls below 1, liquidation can happen. For example, a health factor of 2 means your collateral can drop by 50% before liquidation is triggered. You can find more details on this in the risk parameters section.

What happens if my health factor decreases?

Your health factor changes based on the value of your collateral. If your collateral value rises, your health factor improves, lowering the risk of liquidation. If the value drops, your health factor decreases, increasing the chance of liquidation.

When do I need to repay the loan?

There’s no fixed repayment period. As long as your position is safe, you can keep the loan open for as long as you want. However, as interest accumulates over time, it can lower your health factor, potentially putting you at risk of liquidation.

How do I repay the loan?

Go to the Borrowings section of your dashboard, find the asset you want to repay, and click "Repay." Choose the amount you want to repay and confirm the transaction.

How do I avoid liquidation?

To avoid liquidation, you can either repay part of your loan or deposit more collateral to improve your health factor. Repaying the loan will have a stronger effect on boosting your health factor.