Borrowing

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Astrolend Borrowing Model

The Eclipse DeFi ecosystem offers numerous opportunities to profit, but the landscape is dynamic, making access to instant liquidity essential for capitalizing on many lucrative trades. Astrolend allows you to borrow liquidity quickly without needing to liquidate your existing assets, enabling you to take advantage of fleeting opportunities.

Overcollateralization

Astrolend operates as an overcollateralized protocol, meaning that you must first supply assets as collateral before you can borrow liquidity. This overcollateralization ensures that loans are secure and minimizes risk for lenders. By requiring collateral that exceeds the value of the loan, Astrolend maintains the stability of the protocol.

Borrowing Interest

When you borrow funds on Astrolend, you incur a fee known as “borrowing interest,” which is expressed as an Annual Percentage Rate (APR). The APR is dynamic and increases with the amount you borrow. This rate varies depending on the specific asset and can be found within Astrolend's user interface and protocol documentation.

• Dynamic APR: The more you borrow, the higher your interest rate will be. This mechanism is designed to balance the borrowing demand and ensure the protocol’s sustainability.

Repayment Flexibility

Astrolend does not impose a fixed repayment schedule. You can borrow for any duration as long as your account remains "healthy." The health of your account is determined by the collateral value relative to the borrowed amount.

• Account Health: It’s important to regularly monitor your account’s health. If it falls below a certain threshold, your positions may be liquidated to repay the loan, thereby protecting the protocol.

To avoid liquidation, it is advisable to maintain a buffer above the liquidation threshold and stay informed about your account’s health metrics through Astrolend's monitoring tools.

In summary, Astrolend’s borrowing model provides the flexibility and security needed to engage effectively in the Eclipse DeFi ecosystem, allowing you to maximize your opportunities while managing risk