Borrow

Lavarage lets you take a loan against your tokens without opening a leveraged trade. You keep your tokens as collateral and receive borrowed capital — no directional bet, no P&L to manage. Think of it as: "I want liquidity but I don't want to sell my tokens."

How Borrow Differs from Trading

When to Use Borrow

• You hold tokens you don't want to sell but need capital now
• You want to avoid a taxable sale event while still accessing liquidity
• You want funds for other purposes — other trades, DeFi strategies, or simply holding stablecoins while keeping your token exposure

Borrow is useful when you are bullish on a token long term but need short-term liquidity.

How It Works

1. Select the token you want to use as collateral from your wallet
2. Choose what to borrow — WSOL or USDC
3. Set your LTV (loan-to-value) — this determines how much you borrow relative to the value of your collateral. Higher LTV means more borrowed capital but a tighter liquidation threshold.
4. Review the terms — borrowed amount, interest rate, and liquidation price are all shown before you confirm
5. Confirm and approve the transaction

Once confirmed, the borrowed tokens are sent to your wallet. Your collateral is held by the protocol until you repay.

Managing Your Borrow Position

Your borrow position appears alongside your trade positions in the dashboard. You can:

• Repay — return the borrowed amount (full or partial) to reclaim your collateral
• Add Collateral — reduce your LTV and push your liquidation price further away
• Borrow More — increase your loan against the same collateral (raises LTV)

Interest accrues daily on the borrowed amount, the same way it does for trade positions.

Key Differences from Trade Positions

• No "sell" action — there is nothing to sell because it is a loan, not a trade
• "Borrow More" replaces "Withdraw" in the adjust options — it increases your loan amount
• Add Collateral works the same as it does for trades — it lowers your LTV and gives you more room before liquidation

Risks

Borrow positions carry the same liquidation and interest risks as leveraged trades:

• Liquidation — if your collateral drops in value and your LTV exceeds the liquidation threshold, your collateral is sold to repay the lender. Monitor your health indicator and add collateral if it gets low.
• Interest — accrues daily on the borrowed amount. Factor this into your cost of holding the loan. See Trading for the full breakdown.
• Same risk management applies — keep an eye on the health indicator, and act before it reaches critical levels.

Tips

1. Borrow conservatively — a lower LTV gives you more room before liquidation. You can always borrow more later.
2. Monitor your collateral's price — if your collateral token drops significantly, add more collateral or repay part of the loan.
3. Factor in interest costs — the longer you hold a borrow position, the more interest you pay. Make sure the use of the borrowed funds justifies the cost.

Next: Understand exactly what you pay in Trading.