Borrow
Borrow across connected chains through Replete.
Borrowing requires a user to supply assets as collateral. User can easily supply to the protocol through the user interface, please refer to Supply section to get started.
The easiest way for a user to borrow is through the user interface (dApp). Once you have a position as collateral, you can navigate to the borrow section.
From the borrow section, chose the chain you wish to borrow to, select the asset, the quantity you wish to borrow and submit your transaction. After the transaction is confirmed and has reached finality, the borrowed assets becomes available on the destination chain.
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Borrow architecture
In order for user to be able to borrow across connected chains, Replete utilizes a borrow architecture where the protocol logic, liquidity and accounting is hosted on one chain. The architecture is similar to supplying, please refer to Supply to learn more.
A user that has supplied to Replete can open a borrow position from any connected chain. When the users interacts with the protocol, through a chain that is not the pool chain, a borrow message is sent to the pool chain. The message instruct on behalf (delegate) of the user to borrow an asset. If the asset requires bridging, it will submit the transaction and send the requested borrowed asset to the user including a standard amount of native gas airdrop.
This method upholds a singular truth state on a single chain, enabling collateral positions to be accessible across chains. Collateral supplied on one chain can be utilized to borrow assets on the same or any other supported chain, eliminating the need to monitor states across multiple blockchains and reducing the risk of sequencing errors.
Moreover, by adjusting loan interest rates dynamically and maintaining liquidity within a pooled chain, it becomes feasible for users to stabilize rates more flexibly as there is a single pool chain.
When a borrowing transaction is submitted and completed, the user commences to accrue interest on their debt position. There is no time limit for the user to repay the debt, as long as the Health Factor does not drop below 1.
In the event the Health Factor drops below 1, it can trigger liquidation for the supplied collateral.
It is important to maintain a Health Factor above 1, otherwise liquidation may be triggered.
For users looking to improve their Health Factor the only options are to either supply more collateral or to repay (partially) the accrued debt. A benefit of the architecture is that apart from borrowing, users can supply or repay their debt from connected chains to improve the Health Factor.
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