Borrowing
Last updated
Last updated
On Arbitrum and Ethereum networks you can borrow USDx and sUSD respectively against your deposited collateral up to the borrowing ratio limit. You can then use these tokens as margin to trade in the Synthetix ecosystem or swap them using Synthetix Exchange to pursue other strategies.
Find your active deposits in the LP Dashboard.
Select the deposit you wish to borrow from and click "Manage".
Select the "Manage Debt" tab.
Select "Claim/Borrow".
Enter the amount to borrow and click "Borrow" to sign the transaction.
Note: Borrowing against your deposited collateral does carry the risk of liquidation in the event you fall below the liquidation threshold. Be mindful of your debt especially during events of extreme market volatility.
The borrowing ratio, also commonly known as a minimum collateral ratio or issuance ratio, is the limit that defines how much can be borrowed against the current value of the deposits.
For example, if the borrowing ratio is at 1000%, then a deposit of $10,000 in current market value will allow for a maximum borrow of $1,000.
A borrowing ratio serves to ensure there is ample buffer between loans that are issued and the liquidation ratio.
The liquidation ratio is very important to note, as any loan that falls to the liquidation ratio will have the corresponding collateral deposit be liquidated and irretrievable to the user.
For example, if the liquidation ratio is 125% and a user has an outstanding loan of $1,000 in stablecoins, if the value of their deposited collateral falls to $1,250 or less their position will be liquidated. It is very important to monitor your collateral ratio (C-Ratio) to ensure your loans are healthy especially in times of extreme volatility.
The liquidation ratio serves to protect the value of the stablecoin issued, ensuring there is always more value deposited than the amount of stablecoins circulating.
