Borrow

Lend assets to earn interest, or post sTAO as collateral and borrow against it, through an isolated Silo market on Bittensor.

Isolated markets

Silo pairs assets into separate markets rather than pooling everything together. Risk in one market does not spread to another, so a problem with one collateral asset cannot drain unrelated lenders. The trade-off is that liquidity is split across markets instead of shared.

Lending

Deposit an asset to start earning. The rate is set by utilisation: the more of the supplied amount is borrowed, the higher the rate paid to lenders. You can withdraw whenever there is unborrowed liquidity available, which at very high utilisation may mean waiting.

Borrowing

Deposit collateral, then borrow against it up to the market's loan-to-value limit. Interest accrues to the debt continuously; there is no fixed term and no repayment schedule. Repay any amount at any time.

Positions can be liquidated. If the value of your collateral falls, or your debt grows with interest, far enough that your position crosses the liquidation threshold, part of your collateral is sold to repay the debt and a penalty is taken. Watch the health of the position, not just the price.

Staying safe

  • Borrowing near the maximum leaves no room for a price move. A buffer is what keeps a bad hour from becoming a liquidation.
  • Interest accrues whether or not the price moves, so a position left alone gets less healthy over time.
  • Repaying or adding collateral both improve health. Either works.
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