How Loan works

Deposits and borrowing

Deposit listed tokens into your custodial wallet. A token with a borrowing market is collateral automatically: all of it that you hold in custody backs that market and nothing else. There is no step to post or remove collateral. USDC, and any token without a market, is a free balance: it gives no borrowing power and can always be withdrawn. Depositing does not lend, borrow or repay.

Each market has its own opening LTV, liquidation threshold, cap, minimum, fees and rate. You can borrow USDC up to the opening LTV of the collateral you hold in that market, less the debt you already have in it. Collateral in one market gives no borrowing power in another.

A borrow sends its net amount to your external wallet or another external address you specify. Your principal debt is the gross amount before the opening fee. Repayment is an explicit action, paying accrued interest first. You can repay from custodial USDC or from a lending position, for the debt of any market.

Lending and withdrawals

Contribute USDC to the lending pool. Funds move to Loan treasury; the net contribution becomes a lending position that earns interest. A lending position is not collateral and gives no borrowing power. It can repay your debt in any market.

You can withdraw a lending position in full or in part. The amount leaves the position as soon as you request it: the fixed pending payment earns no further interest. Loan automatically pays it back to your custodial wallet when treasury liquidity permits, unless manual review is enabled. There is no guaranteed immediate withdrawal.

Interest, fees and limits

Loan sets variable annual rates. Accounting runs every 30 minutes, using APR divided by 17,520 periods per year and compounding accrued balances. Lending confirmed at 12:30 first earns at 13:00. Borrowing is charged for its opening period, even if repaid before the next cut. Rate changes apply at the next cut.

Entry and exit fees apply to lending; each market sets its own opening and repayment fees for borrowing. The confirmation screen shows gross amount, fee, net amount and any initial borrowing interest. Ordinary custodial deposits and withdrawals have no additional protocol fee.

Lending limits count active net contributed capital and pending contributions, excluding earned interest. Your borrowing limit covers the debt of all your markets together, with pending borrowing obligations. Each market also has a global cap shared by every account. The lending minimum is at least $5 before the entry fee.

Liquidation per position

Each market is liquidated on its own. When the debt of a market reaches that market’s liquidation threshold, Loan sells that market’s collateral for USDC, sends it to the account’s treasury and closes that debt. Loan keeps all proceeds and bears any loss; no residual debt or surplus is returned.

Nothing else is touched. Your other markets, your lending position, pending lending withdrawals and your USDC balance stay as they are: you lose only the liquidated position.

While a liquidation runs, the account is locked for new borrowing, lending and withdrawals. Deposits still work, and you can still repay the debt of markets that are not being liquidated. Once started, a liquidation continues even if prices recover. Failed or unavailable swaps remain pending. The account unlocks when the liquidation completes.

Account health and position risk

Risk is per market. A position’s health factor is its collateral value × the market’s liquidation threshold ÷ its debt, and the position is liquidated when its debt reaches that threshold. A fall in one token can liquidate that market while the rest of your account is unaffected.

The account health factor shown in the app is an aggregate over your markets with debt. It is informative only: one market can be liquidated while the account figure looks healthy, so the app flags your weakest position.

Sufficient collateral does not guarantee available treasury liquidity. A missing or stale price pauses new debt and collateral withdrawals in the market that needs it; your other markets keep working. Before a collateral withdrawal is accepted, what remains must satisfy that market’s opening LTV. The liquidation threshold is a separate, higher limit.