Borrow
In the Linx App you can borrow when you put up tokens like WBTC, WETH or ALPH as collateral for a loan.
Create a Loan
When you click on 'Borrow' in the menu you will see an overview of the available markets/pools where you can borrow with your tokens as collateral.
You can switch between the tabs for Pools: shows all markets/pools, My Loans: shows your active loans and Liquidations: Loans that are eligble for liquidations
When you click a pool you can open a new loan (or manage your existing loans for that pool.
On the borrow page / side drawer, you can enter a new loan by entering the amount you want to borrow. By default the collateral to back the loan is set to 50% of the LTV. So if the maximum Loan To Value for a pool is 86%, the default collateral is set to have a LTV of 43%. To learn more about liquidations and LTV check out Liquidations
You can change the amount of collateral you are willing to provide by moving the slider left or right. If you click 'show details' just below the Collateral component, you can see all the details of the loan you are about to create.
Liquidation Price: If the collateral token reaches the price mentioned here, your loan can be liquidated
LTV / Liquidation LTV: The Loan To Value ratio of the loan you are about to create and the maximum allowed LTV for the pool/market.
Borrow Rate: Annualised borrow rate you will pay on repaying the loan and will automatically acrue in your loan contract.
Borrow: The token amount you are borrowing
Collateral: The token amount you are providing as collateral
Repay a Loan
When you have an active loan and you click the pool you can see the stats of your loan.
If you want to repay (a part of) the loan you can click 'Manage Loan'
When managing your loan, you can borrow more, repay (a part of) the loan, add more collateral or withdraw collateral.
If you want to repay your existing loan, including interest, you can click 'Max' next to the input field and it will repay the complete loan. Once a loan is completely repaid, you will receive your collateral automatically and the loan is closed.
Withdraw/Add Collateral
In the same screen/side drawer, you can add or remove collateral to change the risk level (LTV) of your loan.
If the price of the collateral goes up vs the price of the token you are borrowing, you choose to take out some collateral. If the price goes down, you might want to add more collateral to make sure your loan does not get liquidated.
Loan To Value (LTV)
The Loan To Value ratio is the value of your loan vs the value of the deposited collateral.
Each pool has a set max. LTV based on volatility, liquidity etc.
On a LTV max of 86% it means that for every $100 of collateral you deposit, you can borrow a max of $86. Since many combinations of collateral and borrow tokens are possible, the ratio is value based.
Most common are stable coins as borrowing token and ALPH, or BTC or ETH as collateral token.
If the ratio of your loan goes above the max LTV of the pool/market, your loan can get liquidated.
Liquidation
A loan can get liquidated when the LTV ratio of a loan goes above the pool/market LTV max.
Liquidations can be initiated by bots, or you can liquidate loans through the Linx App when you go to borrow in the menu and click 'Liquidations'. Loans that can be liquidated are listed on this page and if you have enough of the borrowed token to pay back the loan, you will get a reward in extra collateral. (The value of the collateral you will receive will be higher than the value of the loan you repay, this is the Liquidation Incentive Factor)
When you click 'liquidate' you will need to open your wallet to approve the transaction.
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