How to Borrow

Step-by-Step Borrowing Guide

Borrowing on Everst lets you access liquidity without selling your assets. This guide walks you through the entire process.

Prerequisites

Before borrowing, you must:

1. ✅ Have supplied assets to use as collateral

2. ✅ Enable those assets as collateral

3. ✅ Understand your borrowing capacity

4. ✅ Have native tokens (BNB, etc.) for gas fees

Understanding Your Borrowing Power

Calculate Your Capacity

Your maximum borrowing amount depends on:

Borrowing Power = Σ(Collateral Value × Collateral Factor)

Example Calculation

You supply:
- $5,000 worth of AAPL stock tokens (75% collateral factor)
- 2,000 USDT (85% collateral factor)

Your borrowing power:
AAPL: $5,000 × 0.75 = $3,750
USDT: $2,000 × 0.85 = $1,700
Total: $5,450

Safety Recommendation

Never borrow your maximum! Keep a safety buffer:

• Conservative: Borrow < 50% of capacity

• Moderate: Borrow < 70% of capacity

• Aggressive: Borrow < 85% of capacity

Step-by-Step Process

Borrowing Flow

Complete borrowing journey from collateral setup to loan management

Step 1: Check Your Collateral

1. Go to "Dashboard"

2. View your supplied assets

3. Ensure "Collateral" is enabled

4. Note your "Borrowing Power"

If collateral isn't enabled:

1. Click the asset

2. Toggle "Use as Collateral"

3. Confirm transaction (gas varies by network)

Step 2: Choose Asset to Borrow

1. Navigate to "Markets"

2. Review borrowable assets

3. Check important metrics:

   • Borrow APY: Interest rate you'll pay

   • Available Liquidity: Amount you can borrow

   • Total Borrowed: Market utilization

Recommended Borrowable Assets

For Beginners:

• USDT: Stable, predictable debt with 3-8% rates

• SPY: Diversified ETF with 4-12% rates

For Advanced Users:

• AAPL: Blue-chip stock tokens with 6-18% rates

• TSLA: High-growth stock tokens with 8-25% rates

• NVDA: AI concept stocks with 10-30% rates

Step 3: Enter Borrow Amount

1. Click "Borrow" on your chosen asset

2. Enter the amount to borrow

3. Monitor the impact on your metrics:

   • Health Factor (keep > 1.5)

   • Borrowing Power Used

   • Estimated APY

Real-time Safety Check

The system will display:

• New Health Factor

• Liquidation price

• Interest cost estimates

• Recommended safety buffer

Step 4: Review and Confirm

Before confirming, verify:

• ✅ Health Factor remains safe (>1.5)

• ✅ Interest rate is acceptable

• ✅ You have a repayment plan

• ✅ Gas fee (varies by network)

Step 5: Execute Transaction

1. Click "Borrow"

2. Review in your wallet:

   • Borrowing amount

   • Network fee

3. Click "Confirm"

4. Wait for confirmation (~3-10 seconds)

Step 6: Receive Borrowed Assets

Once confirmed:

• Assets arrive in your wallet

• Interest starts accruing immediately

• Dashboard updates with your position

Managing Your Loan

Monitor Your Position

Check regularly:

• Health Factor: Your liquidation safety

• Accrued Interest: Total interest owed

• Borrow APY: Current rate (variable)

• Total Debt: Principal + interest

Health Factor Management

Health Factor	Status	Action Required
> 2.0	Very Safe	No action needed
1.5 - 2.0	Safe	Monitor periodically
1.25 - 1.5	Caution	Consider adding collateral
1.0 - 1.25	Risk	Add collateral or repay ASAP
< 1.0	Liquidation	Subject to liquidation

When to Take Action

Add collateral or repay when:

• Health Factor drops below 1.5

• Collateral prices are declining

• Interest rates spike significantly

• Market volatility increases

Stock Token Specific Borrowing Strategies

Strategy 1: Liquidity Without Selling

Use Case: Need cash but bullish on your stock tokens

Example:

• Supply 10 AAPL stock tokens ($20,000 worth)

• Borrow 8,000 USDT

• Use USDT for expenses

• Keep AAPL exposure

Strategy 2: Leveraged Long Position

Use Case: Amplify exposure to stock tokens

Example:

1. Supply $10,000 worth of TSLA

2. Borrow 7,000 USDT

3. Buy more TSLA with USDT

4. Profit if TSLA gains > borrow APY

Warning: High risk, can amplify losses

Strategy 3: Hedging Strategies

Use Case: Profit from price declines or risk hedging

Example:

1. Supply 10,000 USDT

2. Borrow 1 TSLA stock token

3. Sell TSLA immediately

4. Buy back cheaper later to repay

Strategy 4: Stock Rotation Strategy

Use Case: Rotate positions based on stock performance

Example:

• Supply strong-performing NVDA stock tokens

• Borrow underperforming traditional bank stocks

• Adjust positions based on fundamental analysis

Strategy 5: Yield Arbitrage

Use Case: Earn spread between rates

Example:

• Borrow at 5% APY on Everst

• Deploy in 8% APY yield farm

• Earn 3% spread (minus risks)

Interest Calculation

How Interest Accrues

Interest compounds continuously with every block:

Daily Interest = (Borrowed Amount × Borrow APY) / 365
Monthly Interest = Daily Interest × 30

Interest Cost Examples

Stablecoin Borrowing (USDT)

Borrow: 10,000 USDT at 6% APY
Daily Interest: 10,000 × 6% ÷ 365 = 1.64 USDT
Monthly Interest: 1.64 × 30 = 49.3 USDT
Annual Interest: 600 USDT

Stock Token Borrowing (AAPL)

Borrow: $5,000 worth of AAPL at 12% APY
Daily Interest: $5,000 × 12% ÷ 365 = $1.64
Monthly Interest: $1.64 × 30 = $49.3
Annual Interest: $600

Common Scenario Handling

Scenario 1: Adding More Collateral

When Health Factor drops:

1. Go to "Markets"

2. Supply more assets

3. Health Factor improves immediately

4. No need to repay

Scenario 2: Partial Repayment

To reduce debt burden:

1. Click "Repay" on borrowed asset

2. Enter partial amount

3. Confirm transaction

4. Interest stops accruing on repaid portion

Scenario 3: Market Volatility

During price swings:

1. Monitor Health Factor closely

2. Set price alerts

3. Have reserve funds ready

4. Consider reducing position size

Scenario 4: Stock-Specific Events

Pre-Earnings Season:

• Monitor earnings dates for held stocks

• Adjust positions before volatility increases

• Consider reducing leverage ratios

Major News Events:

• Follow stock-related news

• Operate conservatively before major announcements

• Prepare for quick market response

Stock Market Timing Considerations

Trading Hours Impact

• US Stock Trading Hours: Most active price updates

• After-Hours/Weekends: Relatively limited price movement

• Holidays: Traditional markets closed but DeFi continues operating

Optimal Borrowing Timing

• Low Volatility Periods: Establish leveraged positions

• Pre-Earnings Season: Increased stock borrowing demand

• Pre-Market Opening: Prepare for intraday trading strategies

Tips for Safe Borrowing

For Beginners

1. Start with small amounts

2. Borrow USDT only

3. Keep Health Factor > 2.0

4. Understand liquidation risks

5. Have clear repayment plan

Best Practices

• Never borrow maximum capacity

• Diversify collateral types

• Monitor market conditions

• Keep emergency reserves

• Set up price alerts

• Check rates daily

• Plan for worst-case scenarios

Risk Management

• Calculate liquidation prices

• Stress test your positions

• Account for interest accumulation

• Consider insurance options

• Use stop-loss strategies

Advanced Risk Control

• Diversify Collateral: Don't concentrate all collateral in single stock

• Set Alerts: Configure alerts for critical price levels

• Regular Rebalancing: Adjust positions based on market changes

• Liquidity Management: Always ensure funds available for emergency repayment

Troubleshooting

"Insufficient Collateral"

• Supply more assets first

• Enable assets as collateral

• Check borrowing capacity

"No Liquidity Available"

• Asset fully utilized

• Try smaller amount

• Wait for repayments

• Choose different asset

"Transaction Failed"

• Increase gas limit

• Check Health Factor

• Verify collateral enabled

• Reduce borrow amount

"Health Factor Too Low"

• Can't borrow more

• Add collateral first

• Or repay existing loans

"Stock Token Specific Issues"

• Check market hours

• Verify price oracle status

• Consider stock-related news impact

• Contact support team

Practical Tools and Monitoring

Dashboard Features

• Real-time Health Factor: Continuous liquidation risk monitoring

• Interest Tracker: View accumulated interest costs

• Price Alerts: Set notifications for critical price levels

• Position Overview: Unified view of all borrowing positions

Mobile Monitoring

• Set push notifications

• Mobile-friendly dashboard

• Quick emergency actions

• Offline price tracking

Next Steps

• Managing your loan: Monitor Health Factor as explained above

• Repaying: Repaying Loans

• Avoiding liquidation: Liquidation Guide

• Understanding risks: Risk Management

Need Help?

• Community: Visit our forums

• Support: [e-mail]

• FAQ: Common Questions

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Remember: All loans are over-collateralized and subject to liquidation if Health Factor < 1.0. Borrow responsibly.