Borrow

Borrowing with Locked Yield allows you to lock in a fixed borrowing rate for a predefined maturity.

This product is designed for users who want:

• predictable borrowing costs,

• no exposure to floating-rate volatility,

• clarity on total repayment at maturity.

Once opened, the position behaves like a fixed-rate loan.

How Fixed Borrowing Works

When you open a Fixed Borrow position:

1. You deposit collateral.

2. You borrow an asset at a fixed interest rate.

3. The rate and maturity are locked until expiry.

4. Repayment happens at maturity according to the contract terms.

There are no margin calls related to interest rate changes — only collateral risk applies.

Key Characteristics

• Rate certainty: borrowing cost is known upfront.

• No mark-to-market on rate: interest does not change over time.

• Collateralized: subject to liquidation if collateral value drops.

• Non-cancelable: must be held to maturity.

This is a commitment-based product, not a trading instrument.

Collateral & Risk

• Collateral value is continuously monitored.

• Health factor depends on:

  • collateral price,

  • borrowed amount,

  • risk parameters of the asset.

If collateral value drops below required thresholds:

• liquidation procedures may be triggered,

• penalties and fees apply.

Interest rate movements do not affect liquidation risk.

Liquidation Overview

A Fixed Borrow position can be liquidated when:

• collateral value falls below the maintenance level,

• the position becomes undercollateralized.

Liquidation mechanics follow protocol-wide rules:

• partial or full liquidation depending on severity,

• liquidation fees apply,

• excess (if any) is returned to the borrower.

Liquidation risk exists independently of fixed yield mechanics.

Early Exit

Fixed Borrow positions cannot be closed early through the protocol.

Once opened:

• the borrowing rate is fixed,

• the debt must be repaid at maturity,

• no protocol-driven unwind is available.

This protects:

• lenders providing fixed capital,

• the integrity of rate formation,

• the protocol balance sheet.

Choosing the Right Term

If you may need earlier :

• prefer shorter maturities,

• roll deposits manually,

Fixed Deposit is best suited for users require cost certainty.

Repayment at Maturity

At maturity, the borrower must:

• repay principal,

• repay accrued fixed interest.

After repayment:

• collateral is released,

• the position is closed.

Failure to repay may result in liquidation.