Borrowing Assets

1) Firstly, you need supply an asset on Tectonic. The tutorial for supplying an asset can be found here

Note: If you supplied an asset in the "Main Pool", you can only borrow against this with assets within this pool. Alternatively, if you supplied an asset in the "LCRO Pool", you can only borrow against this with assets within this pool. Read more about isolated pools here

2) Once supplied, you will need to enable the asset for use as collateral. You can do this either in the Dashboard page or within the individual asset markets page (for example, the individual asset markets page for USDC can be found here)

You will need to confirm the "Use as collateral" transaction in your wallet.

3) Then, head to the Markets page and select the asset that you intend to borrow. You will be taken to that asset's individual markets page

4) Click on the “Borrow” button and indicate the amount you intend to borrow (Example below is for TONIC)

5) Confirm your transaction in your wallet

6) A pop-up will appear to indicate a successful transaction

7) Upon successful completion, you can then view your supply and borrow balances within the Dashboard Page

Commonly asked questions

Q) How do I ensure that I maintain my loan below liquidation levels?

A: The best way to determine the "health" of your loan is to look at the lava bar (shown in the screenshot below). 90% indicates the maximum threshold that you can borrow.

As a rule of thumb, we recommend that you maintain your lava bar below 50%. This loan-to-value ratio could help better protect your position from liquidation during volatile market periods.

Q) What does "Exceeds Borrow Limit" mean?

A: If you attempt to borrow an amount that takes your lava bar beyond 90%, you will exceed our specified borrow limit and not be allowed to complete the transaction.

Q) Why can't I borrow the same asset that I deposited?

A: We have disabled the supplying and borrowing of the same asset on this platform. This means that if you have supplied asset A, you will not be able to use this asset as collateral to borrow more of asset A.

This is done as we are aware that whales often do leveraged stablecoin farming, to receive more incentives. Leveraged stablecoin farming is the act of supplying and borrowing the same asset, typically stablecoins, in a continuous loop. This restriction is thus put in place to ensure that our incentives are spread across a larger Cronos user base, benefiting all users who are using the Tectonic platform.

Q) What is Net Borrow APY / Distribution APY?

A: Net Borrow APY = Fees paid by user for borrowing asset - Distribution APY

  • If Net Borrow APY is negative, Distribution APY > Fees paid for borrowing asset. This essentially means the user is being paid to borrow the asset.

Distribution APY = TONIC rewards paid to user

  • if Distribution APY = 0%; there are no TONIC rewards paid out for that market

Q) What is "Borrow balance"?

A: Borrow balance is the total amount of loans you have taken out on Tectonic, displayed in USD terms

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