Borrow FAQ

How do I lock/release collateral?

Open the Securd App and click on Borrow. Connect your wallet and click on the Account corresponding to the LP token you want to lock/release. Select the “Lock/Release” tab, specify the amount (or % of balance) you would like to lock/release and click on the “Lock/Release” button. After reviewing the transaction details, click on “Confirm”.

How do I leverage/deleverage my LP Token?

Open the Securd App and click on Borrow. Connect your wallet and click on the Account corresponding to the LP token you want to leverage/deleverage. Make sure that you already have LP Token locked in Collateral. Select the “Leverage/Deleverage” tab, specify the amount (or multiplier) of leverage/deleverage you would like to reach and click on the “Leverage/Deleverage” button. After reviewing the transaction details, click on “Confirm”.

What does Collateral Factor (CF) mean?

The Collateral Factor, or CF, is the ratio between the collateral value and the loan value and represents your level of repayment guarantee.

What is Leverage ?

Leverage consists in using borrowed funds in order to increase an existing position. As long as the position return is higher than the borrow rate, leverage is profitable.

How much can I leverage my position?

For each LP Token, Securd define a minimum CF based on the volatility and the liquidity of the token pair. You can leverage your position as long as your CF is above this minimum level.

What are the risks of using Securd?

As a Borrower, you are exposed to Liquidation Risk. This risk materializes if your Collateral Factor (CF) falls below the Liquidation Threshold (LT). In that case, part of your collateral is automatically sold at a discount to repay your loans and you will suffer a loss equal to liquidated collateral multiplied by the liquidation discount. In addition, you are exposed to Smart Contract Risk that we mitigate through multiple reviews and audits.

How can I avoid Liquidation?

At any moment, you have the ability to raise your Collateral Factor (CF) by deleveraging your position, locking additional collateral or partially repaying your loans. By doing so, you can maintain your CF above the Liquidation Threshold (LT) and avoid undesired liquidation.

How is my Borrow Rate calculated?

The Borrow Rate is calculated for each token based on the percentage of deposits that is borrowed, called the Utilization Rate. As Utilization will move up or down, your Borrow Rate will vary and reflect the balance between Supply & Demand for this token.

What is the cost of using Securd?

As a Borrower, you will pay a Borrow Fee of 0.1% of the loan amount when contracting a new loan.

When do I need to pay back the loan?

As long as your Collateral Factor (CF) is above the Liquidation Threshold(LT), you can decide whenever you pay back your loan.

How do I pay back the loan?

You have two ways:
  • by using the “Deleverage” function, you will automatically reduce both collateral and loan position
  • by using the “Repay” function, you will send an amount in the loan currency and reduce your loan position while keeping your collateral position unchanged