Before you start borrowing, you need to ensure you have sufficient collateral in place (see Depositing, for more info). Infinity accepts a wide variety of collateral from Basic tokens (e.g. ETH, USDT), Deposit tokens (e.g. aETH, cETH), and Complex tokens (e.g. Uniswap V3 LPs, Curve LPs) , enabling you to leverage more than you would traditionally.
To borrow, simply head to the Borrow section, select 'Borrow', choosing your preferred Token, and the appropriate amount.
The amount you can borrow depends on your Account's Health Score, and Market Conditions. The maximum possible amount one can borrow depends on:
- The Active Account type (e.g. General, Stablecoin, Single Coin)
- The Amount and Type of collateral assets in the account
- The Health Score
Provided sufficient collateral is in place, the amount one can borrow from the market depends on the number of potential Lenders, and the rate at which those potential Lenders are willing to lend.
Loan repayments are done in the same currency as that which was borrowed. For example, if you borrowed ETH, you would need to pay back both Interest and Principal in ETH. When paying back your loan, you may choose to pay back a partial or full amount. In both cases, you will need to have that amount, as well as the interest owed, of such currency available in your Trading Account otherwise the Repayment process may fail.
The interest rate paid is a floating rate that changes constantly throughout the day depending on supply and demand. The actual interest payment is performed when you repay the loan, and not throughout the life of the loan. You can find the total amount of interest owed in your Portfolio.
The health score represents, broadly, the total amount of assets you have (adjusted for risk) vs the total amount of liabilities. The purpose of the Health Score is to ensure that there are always enough assets available to cover losses should a borrower be unable to pay back their loan.
The higher the Health Score, the more you may borrow. As your assets decrease, or, similarly, as your borrowing increases, the Health Score will decrease. When the score decreases to a value of 100%, some or all of your collateral may then be liquidated.
Currently, there is no fixed time period to pay back the loan. As long as your Health Score is greater than 100%, you can borrow for as long as needed. Note that as time passes, the value of your Loan may increase, vis-a-vis the assets and the Health Score may move up or down accordingly. When your Health Score drops, there is an increasing likelihood that your assets may be liquidated.