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The borrow page allows you to borrow various assets using assets from your Dolomite balance as collateral.
Borrowing is one of the core features offered on Dolomite. Borrowing enables you to free up capital without needing to sell your holdings, perform more complex strategies of looping and hedging, and maximize the use you get out of your assets.
If you're familiar with borrowing on protocols like Aave, there are two key aspects of Dolomite borrowing that are different:
- Aave and similar protocols work directly from your wallet. Anything you deposit to Aave acts as collateral, and anything borrowed goes into your wallet. Dolomite works differently. Assets deposited to Dolomite are not by default used as collateral, just added to your Dolomite Balance for use anywhere on Dolomite. To use those assets as collateral, they must be added to a
Borrow Position(more info on that below).
- All collateral and borrowing on Aave and similar protocols is done in one pool, tied to your wallet. All your borrowing is done using all your collateral. On Dolomite, you can have many isolated
Borrow Positions, comparable to having multiple different wallets each using Aave independently. This allows you to hold riskier borrows separate from more stable ones, and in the case of liquidation only one borrow position is liquidated while the others remain open.
At a high level, borrowing is performed by putting up collateral for a loan, and then assets are borrowed against that collateral. Your collateral is used to ensure lenders get repaid in the case that a loan isn't repaid. So if you borrow $100 of ETH, there needs to be enough collateral supplied so that lenders can always be repaid that $100 of ETH.
Liquidation is what occurs when the value of your collateral becomes too low compared to the amount borrowed. Generally this will happen when the value of your collateral drops too low, or the value of the assets borrowed gets too high.
So for example, if you supply $100 of USDC as collateral and borrow $60 of ETH, your position is well collateralized. But if the price of ETH were to double, the value of what you owe would be $120, meaning that your $100 of collateral would be insufficient to repay lenders. That is why the position would be liquidated before reaching that point, converting your USDC to ETH and repaying the ETH lenders that supplied your borrowing. That liquidation occurs when your
Health Factordrops below 1.
Your health factor is a representation of how much collateral you have compared to how much you are borrowing. This takes into account a buffer called a
liquidation thresholdto make sure that lenders can be repaid even in turbulent market conditions.
So for example if you have $100 of USDC as collateral and are borrowing ETH, the liquidation won't occur when the ETH is also worth $100, since converting your USDC to ETH in order to repay lenders may result in getting less than $100, leaving lenders without reimbursement. Each asset has a different liquidation threshold based on the risk associated with liquidating that asset.
Each of these above elements applies independently to each
Borrow Positionyou hold. Each
Borrow Positionis independently collateralized and liquidated, allowing you to hold riskier positions that don't affect safer positions.
Borrow Positionsare also distinct from your Dolomite Balance, meaning liquidations don't affect assets that are deposited onto Dolomite that you haven't elected to use as collateral.
Borrow Positioncan have up to 32 different assets used across what is supplied as collateral and what is borrowed.
The borrow page with no positions open
The borrow page shows a wide range of information that is relevant to borrowing. Let's break it down so you know what you're looking at.
On the left side of the page you will find your Dolomite Balances. This displays the assets you currently have deposited to Dolomite and available for use. If you don't see a balance shown here, make sure that you've first deposited your assets onto Dolomite from your wallet on the Balances Page. The balances displayed here can be added to a
Borrow Positionto be used as collateral, and when you borrow assets they will be added to the balances displayed here.
At the top center of the page you'll find a summary of all your borrow positions. This gives a sum of the amount borrowed across all borrow positions, a sum of the amount borrowed across all borrow positions, and what APR you are currently earning, paying, and the net between those. The APR shown is relative to your collateral amount.
On the right side of the page you'll find a panel that displays borrowing and lending information about each of the available assets on Dolomite. Shown for each asset row is the APR earned for supplying that asset (by default earned by any user with that asset deposited on Dolomite) as well as the APR paid when borrowing that asset.
Certain assets Isolation Mode assets on Dolomite are not available for borrowing, and are displayed with the text "Collateral Only". Those assets generally earn some form of yield from outside of Dolomite, and more information about that can be found on the Balances page or in our Integrations documentation.
To see more information about borrowing any of the listed assets, click on the row to expand it.
Once expanded you will see additional information about the asset.
Total Supplied - This is the amount being supplied on Dolomite for the selected asset. This supply is a summation of all deposits on Dolomite for that asset.
Total Borrowed - This is the amount of that asset being borrowed across all borrow positions from all users.
Utilization Rate - This represents the percent of the total supply that is currently being borrowed. The ratio of the amount borrowed to the amount supplied is what determines the APR for borrowing and supplying the asset.
Oracle Price - Dolomite's borrowing capabilities are made more secure by using an "Oracle Price" to value each asset. This price is supplied by Chainlink and is based on the price the asset is being traded at across many different exchanges and protocols, providing a volatility-resistant metric for the value of the asset.
Liquidation Threshold - This is the maximum amount relative to your collateral that can be borrowed before being liquidated. So in the image above the liquidation threshold for ETH is 86.96%, meaning that with $100 of USDC collateral, you cannot borrow more than $86.96 worth of ETH. Beyond that the
Health Factordrops below 1 and the position will be liquidated.
Liquidation Penalty - When the position is liquidated, enough of the collateral is sold to repay lenders, plus the liquidation penalty which is paid out to the protocol to disincentivize lqiuidations. You can read more on liquidation penalties on the Risk Mitigation documentation page.
At the center of the page you'll see a big button labeled "Open New Borrow Position". If you'd like to borrow on Dolomite, this is where your journey begins. See below for full information on how to borrow.
Click the "Borrow" tab on the navbar on the top left of the Dolomite web app to navigate to the Borrow page. If on mobile, tap the menu in the upper right of the screen to expand it, and then tap "Borrow" to navigate to the Borrow page. You can also reach the Borrow page here: https://app.dolomite.io/borrow
In the center of the page you will see a big button that says "Open New Borrow Position". Clicking this will expand it to display an input field and asset selector.
Once expanded, you will see a few pieces of information displayed and be able to add collateral to a new Borrow Position. Begin by using the asset selector to select the asset you would like to use as collateral. The asset selector can be found on the right side of the input field, above the "Add" button and below the "Max" button. In the image above USDC is currently selected.
Once you have selected the asset you would like to use as collateral, enter into the input field the amount of that asset that you would like to use as collateral. Keep in mind that the amount you will be able to borrow is determined by the amount you use as collateral. You can see above the input field the amount of the selected asset you have available for use, where it says "Dolomite Balance".
Once you have entered an amount, you will see the value reflected below next to the "Add" button, which will become active as long as you have enough available balance to add that amount in collateral.
Click "Add" and confirm the transaction in your wallet to create a new borrow position and add the entered amount of the selected asset as collateral.
Not that if you would like to add any Isolation Mode assets as collateral, they must be selected at this step. Isolation Mode assets are displayed in the asset selector with a shield icon
next to their name. So for example if you would like to use GLP collateral for a position, it must be selected during this step. If you open the position with USDC (or any other asset) as collateral, you will be unable to deposit GLP collateral to that borrow position later on.
Shortly after confirming the transaction in your wallet to open your borrow position, you should see your new borrow position appear above the "Open New Borrow Position" button. In the image above you can see a position with $4 of collateral added. New borrow positions don't start with anything borrowed yet, so the
Health Factoris displayed as infinite.
Click on the borrow position to expand it.
After expanding the borrow position, more information is presented. You can see the net interest on the position as well as the exact balances of any assets borrowed or supplied as collateral. You are also now presented with two buttons,
If you have no assets borrowed, an indicator will be display
Manage Collateraltab expands the panel to display two additional tabs -
Remove- as well as an input field. This is where you can manage the collateral of the borrow position if you wish.
You can add additional collateral to the position, which will allow you to borrow more or improve your position's health. When adding collateral, it can be any of the assets shown in the asset selector, displayed at the right side of the input field.
You can also remove collateral, returning it to your Dolomite Balance. When removing collateral, you will be able to select any of the assets you currently are using as collateral.
Manage Collateral, you will be able to see a
ZAP - Trade before addingoption. When you click the blue "ZAP" checkbox, two sides of the
Zaptrade will appear. As suggested by the name, this
Zapwill take an applicable asset and convert it to the desired asset and then add that asset as collateral within the position. If you already have the assets in your Dolomite Balance, you can
Zapit to any asset you wish to add as collateral to the position, as long as the asset conforms with Isolation Mode rules of only adding to a borrow position that was originally opened using that Isolation Mode asset.
Using this Dolomite
Zapfeature allows you to utilize a wider range of Dolomite Balance assets as collateral all within the Dolomite platform. It removes the need to take your assets off of Dolomite to trade them first, instead allowing you to hold one asset in your Dolomite Balance but use a completely different asset as collateral. For example, you may only hold USDC in your Dolomite Balance, but would like to use ETH as collateral. Rather than needing to trade first, you can go straight from USDC in your Dolomite Balance to ETH collateral in your borrow position.
Manage Loantab displays two tabs -
Repay- as well as an input field. This is where you can manage the assets that are being borrowed in this borrow position. Proceed to the next step to learn more about borrowing.
To begin borrowing, select the asset you would like to borrow from the asset selector to the right of the input field. In the image shown in the step above it is currently displaying ETH. Once you have selected the asset you would like to borrow, the current amount of the asset being borrowed will be displayed where it says "Position Debt". This will display 0 if nothing is yet borrowed. Your Dolomite Balance of the selected asset will also be displayed where it says "Dolomite Balance".
When you have selected your asset, input the amount you would like to borrow.
After you have entered an amount, you will see that new information is displayed. You will see how your position debt changes, increasing by the amount being borrowed. You will also see how your Dolomite Balance will change, increasing by the amount being borrowed. And lastly you will see how the borrow position's position health will change as a result of borrowing. The more you borrow, the lower your position health. Be careful to keep your position health safely above 1 by assuring that there is more than enough collateral for the amount being borrowed.
If you are satisfied with the information displayed, click "Borrow" to borrow the entered amount of the selected asset, and confirm the transaction in your wallet. Once the transaction is confirmed, the borrowed assets will be added to your Dolomite Balance.
Zap - Trade and Deposit as Collateralis a perfect tool if you want to increase your exposure to an asset or perhaps employ a strategy such as "looping." When you click the blue "ZAP" checkbox, two sides of the
Zaptrade will appear. This
Zapwill borrow an asset using the collateral in the borrow position, then convert it to the desired asset, and finally add it as collateral within the position. Since this
Zapfeature uses your debt to acquire additional collateral for the
borrowposition, it is possible to borrow more than the existing collateral's value.
For example, you may have a position with $100 of USDC collateral. Using
Zapyou can borrow $400 of ETH, then have that ETH traded into USDC and added as collateral, leaving you with a position that has $500 of USDC collateral and $400 of borrowed ETH.
Zapmethod allows you to "loop" in one click, removing the need to use foreign mechanisms to obtain the desired asset and deposit into Dolomite multiple times.
Shortly after confirming the transaction, the amount borrowed will be added to your Dolomite Balance and the debt owed on the Borrow Position will be displayed on the right side of the Borrow Position. If you used the
Zap - Trade and Deposit as Collateraloption, the borrowed amount will be deposited directly into the Borrow Position instead of your Dolomite Balance.
🎉 With that, you've successfully opened a Borrow Position on Dolomite! You can continue to modify the position, borrowing more, repaying the loan, adding collateral, or removing collateral. To fully close out a position, follow the guide below.
To close a borrow position you must first repay any debts, then you can withdraw your collateral from the position.
The first step of closing out your Borrow Position is to repay all debts. Click on the Borrow Position to expand it, then click the
Manage Loantab. After that, click the
Once you have properly navigated to the
Repaytab of the Borrow position, use the asset selector on the right side of the input field to select the asset you would like to repay. In the image above, ETH is selected as that is the only asset being borrowed.
To fully repay the debt owed, click the
Maxbutton displayed above the asset selector. This will auto-populate the input field with the full amount owed, and will make sure that it accounts for any "dust" (small fractions of an asset) as well.
In the image above you can see that additional information is displayed about what will happen after the transaction is complete. The position debt goes from 0.001 to 0, the amount owed is withdrawn from the Dolomite Balance, and the Position Health goes to infinity since there is no debt left.
Once you have reviewed the information, click the "Repay" button and confirm the transaction in your wallet to repay the debt.
After the debt is repaid, you will see that no assets are owed on the position:
A great method to close a position is to use Zap, allowing you to repay your debt using the position's collateral, meaning no external assets are needed to close a position. This method is available in an open
borrowposition under the
Repaytab. When you click the "ZAP" checkbox, two sides of the
Zaptrade will appear. This
Zapwill use the collateral in the position to repay the debt, trading the collateral asset into the asset needed to repay the loan.
Please note that you will need to select the amount of your collateral that you would like to trade into the asset you owe, you cannot set an exact amount that you would like to receive from the zap trade due to fluctuations that can occur in the price. To be sure your loan is paid off, it is recommended that you zap more than the amount owed.
For example, if you have $200 of USDC collateral and owe $100 of ETH, it is recommended that you zap over $100 of USDC to be sure the loan is paid off. Any excess ETH left after repaying the loan will be added to the collateral of the borrow position.
Once you have no remaining debts on the Borrow Position, you are free to withdraw all your collateral back to your Dolomite Balance.
Navigate to the
Manage Collateraltab of the Borrow Position, then select the
If you have only one asset used as collateral, the asset selector will have that asset preselected. If you have multiple assets used as collateral you can use the asset selector to the right of the input field to select which asset you would like to remove from the borrow position.
To remove all your collateral and close the Borrow Position, click the "Max" button above the asset selector. This will auto-populate the input field with the total amount of collateral you have for that asset, and will include any "dust" (small fractions of an asset) that has accumulated from interest.
After clicking "Max" you will see new information displayed. In the above image you can see that the position collateral will decrease from 4 USDC to 0, that the Dolomite Balance will increase by 4 USDC, and you can see that the "Remove" button text has changed to "Close Borrow". Because this is the last of the collateral in the position, removing it closes the Borrow Position and returns the collateral to the Dolomite Balance.
Once you have reviewed the information, click "Close Borrow" and confirm the transaction in your wallet to close out the borrow position.
Shortly after confirming, the Borrow Position will no longer be displayed on the Borrow page and the collateral you removed will be returned to your Dolomite Balance.
This method is available in an open
borrowposition under the
Removetab. When you click the "ZAP" checkbox, two sides of the
Zaptrade will appear. As suggested by the name, this
Zapwill take an applicable collateral asset and convert it to the desired asset, then add that asset to your Dolomite Balance. In the case that you have no debt within the position and remove all the collateral, the position will close after completing the
For example, if you have $100 of USDC as collateral in a borrow position, instead of just withdrawing that USDC to your Dolomite Balance, you can have it "zapped" to $100 of ETH. This will withdraw the $100 of USDC collateral from your borrow position, trade it into ETH, and add that ETH to your Dolomite Balance.
🎉 Congratulations, you have successfully closed your Borrow Position! To review past Borrow Positions, click on the History tab on the navbar, and once you arrive on the History page select the "Borrows" tab on the page to see all your past Borrow Positions.