Skip to main content

Borrowing Assets

Figure 1: The Borrow page of Euler

Borrowing assets on Euler allows you to use your deposited collateral to access additional liquidity. This guide will walk you through the process of borrowing assets from Euler Vaults.

Why Borrow Assets?

Borrowing assets can be useful for various purposes, such as accessing liquidity without selling your collateral, leveraging your position for potential gains, or participating in specific strategies. Borrowers pay interest based on the vault's Interest Rate Model (IRM), which is distributed to suppliers.

warning

Borrowing involves risks, including the potential for liquidation if your health score falls below a certain threshold. It's crucial to monitor your position and maintain a healthy collateral ratio.

Finding Borrow Pairs

The "Borrow" page in the Euler app (app.euler.finance/borrow) lists all available borrow pairs.

  1. Navigate: Go to the "Borrow" page.
  2. Browse Pairs: Each row in the table displays:
    • Collateral Asset: The asset you will supply as collateral (with market name)
    • Debt Asset: The asset you wish to borrow (with market name)
    • Supply APY: The annual percentage yield for supplying the collateral asset (may include rewards)
    • Borrow APY: The annual percentage yield for borrowing the debt asset (may include rewards)
    • Max ROE: The maximum potential Return on Equity for the pair
    • Max Multiplier: The highest leverage multiplier available for this pair
    • LLTV: The liquidation loan-to-value ratio for the pair
    • Liquidity: The available liquidity for borrowing, shown in both USD and asset units

You can sort and filter by any of these columns. Click on a pair to view more details and open a borrow position.

info

Each APY value is inclusive of intrinsic yield (e.g., staking yield) and available rewards campaigns. Hover over the value for a breakdown.

Risk Considerations

Borrowing involves risks, including smart contract risk and the risk of liquidation. Understand the specific risks associated with the pair before borrowing.

Understanding the Borrow/Multiply Position Page

When you select a borrow pair, you're taken to a detailed page that is shared by both Borrow and Multiply actions. The only difference is the form shown, depending on whether you select "Borrow" or "Multiply" at the top.

Key Metrics and Sections:

  • Overview: At the top, you'll see the collateral and debt assets, the market, and a summary of key metrics.
  • Key Metrics: These include:
    • Supply APY: Yield for supplying the collateral asset.
    • Borrow APY: Cost (or reward) for borrowing the debt asset.
    • Max ROE: Maximum potential Return on Equity.
    • Max Multiplier: Highest leverage available for this pair.
    • LLTV: Liquidation Loan-to-Value ratio.
    • Liquidity: Available liquidity for borrowing, in both USD and asset units.
  • Oracle Section: This section shows which price oracle is used for the pair, providing transparency on how prices and risk are determined.
  • Tabs for Collateral and Debt: You can switch between the "Collateral" and "Debt" tabs to see more details about each vault, including risk parameters, governor, exposure, utilization, and more.
tip

The same page is used for both Borrow and Multiply. Simply select the desired action at the top to switch between the two forms.

The Borrowing Process

Once you have chosen a pair on the "Borrow" tab:

  1. Specify Amount: In the borrow interface, enter the amount of the debt asset you wish to borrow. You can often see your wallet balance and use a "Max" button.
  2. Collateral Selection: Choose the source of your collateral. If you have the required asset in your wallet, you can supply it directly. If you already have the asset supplied in your Savings (account 0), you can select it as the collateral source using the drop-down menu that appears. This allows you to use existing deposits or supply new collateral as needed.
  3. Confirm Borrow: After approval (or if already granted), click the "Borrow" button and confirm the transaction in your wallet. This transfers the borrowed asset to your wallet and requires a gas fee.
  4. Approve (if necessary): If this is your first time using a particular asset as collateral, you will need to approve the Euler smart contracts to interact with your collateral token. Euler uses Permit2 by default for token approvals, which allows for more gas-efficient approvals and revocations. You can disable Permit2 usage in the settings if preferred. If your wallet supports EIP-7702, it will be automatically detected and approvals will be batched with the borrow transaction, eliminating the need for a separate approval transaction or message signature.
note

The Net APY in the transaction summary takes into account the impact your position has on the vaults, reflecting where the new interest rates will be at. This does not consider impact on rewards.

tip

ou can either supply directly by clicking "Open position" or use "Add to batch" if you want to build a more complex transaction (for example, batching multiple actions together before submitting). Batching can help save on gas and streamline your workflow when performing several actions at once.

After Borrowing

  • Portfolio Update: Your borrowed assets will appear under the "Positions" tab within your "Portfolio" section. You will see your borrow balance and the corresponding Borrow APY.
  • Managing Your Position: Monitor your health score and collateral ratio regularly. Adjust your position as needed to maintain a healthy collateral ratio and avoid liquidation.
  • Repaying: You can repay your borrowed assets at any time from the Portfolio section. You may choose to repay your debt from your position's collateral, savings, or wallet.