Borrow

Borrowing draws USDG from the supply vault against the Stock Tokens in a position. Before you sign, the liquidation price tells you where the position stops meeting its requirement with the new loan on it. In this guide you check that price, borrow, watch the position and repay.

Before you start#

• A margin account with a deposit, as in open an account.
• The client, deployments, wallet and account of that guide. In code, account is the address that owns the position: your smart account, or your wallet when you act from it.

In the app#

The app shows the liquidation price of the asset that governs the chosen position under the bar, with the loan you are typing counted in, and the regime in words. In an unknown session it is the price at which borrowing stops. One line composes a deposit, loan, repayment or withdrawal, and shows before the wallet is asked:

• what the position can borrow: its equity above its requirement and, before a closure, above a fifth of its gross exposure, within the debt caps
• the premium the loan would owe over a 48-hour closure
• the caps, the guardian's pause, halted assets, the asset's deposit cap and the issuer's pause and blocks

Every transaction is simulated first, and a revert is explained in words. Loans and withdrawals go to your wallet.

From code#

const borrowing = 100_000_000n

const price = await accounts.liquidationPrice(client, deployments, account, CROSS, 'TSLA', borrowing)

const { equity, requirement, missing, regime } = await accounts.health(client, deployments, account, CROSS)
const { debtCap, weekendDebtCap, weekendLeverage, borrowingPaused } = await accounts.limits(client, deployments)

const call = accounts.borrow(deployments, { position: CROSS, assets: borrowing, account, receiver: owner.address })

await client.simulateContract({ ...call, account })
const hash = await wallet.writeContract(call)

const { debt, premium, assets } = await accounts.repayment(client, deployments, account, CROSS)
const leverage = await accounts.leverage(client, deployments, account, CROSS)

import { usdgAbi } from '@tapehouse/sdk'

await wallet.writeContract({
  address: deployments.tokens.USDG,
  abi: usdgAbi,
  functionName: 'approve',
  args: [deployments.tapehouse.MarginAccounts, assets],
})
await wallet.writeContract(accounts.repay(deployments, { position: CROSS, assets, account }))

What to expect#

• Interest accrues in the supply vault, at a rate that rises with utilisation. While the 24/5 session is closed, over weekends and holidays, each position's debt also carries a premium on top of the vault's interest, which the position's equity counts against.
• Borrowing and withdrawing from a position in debt close for a position holding an asset whose band is halted or whose Stock Token has a multiplier change pending. After a halt lifts, they stay shut for thirty minutes (AssetRecovering), so a band that comes back is not trusted at once. Deposits and repayments stay open throughout.
• A position that falls short is sold by the liquidator. Over a weekend closure, positions short at their bands' low edges may go to the reopening auction instead.

Errors you may hit#

Next#

• Earn by supplying the USDG others borrow.
• Liquidation and weekend gap cover.
• The margin accounts.