# 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](https://github.com/BlockStreet-finance/BlockStreet-gitbook/blob/main/everst/.gitbook/assets/borrowing-flow.png)

*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](https://block-street.gitbook.io/docs/user-guides/borrowing/repaying-loans)
* **Avoiding liquidation**: [Liquidation Guide](https://block-street.gitbook.io/docs/risk-and-safety/liquidations)
* **Understanding risks**: [Risk Management](https://block-street.gitbook.io/docs/risk-and-safety/risk-and-safety)

## Need Help?

* **Community**: Visit our forums
* **Support**: <support@blockstreet.money>
* **FAQ**: [Common Questions](https://github.com/BlockStreet-finance/BlockStreet-gitbook/blob/main/everst/resources/faq.md)

***

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