Below, we’ve prepared a short tutorial on how to borrow $USDC with Numerai tokens.
How do $USDC Loans work?
Fringe Finance maintains a growing list of altcoin assets that can be used as collateral for $USDC loans. We intend to integrate as many assets as possible into the Fringe Platform.
Some of the assets you can take out instant $USDC overcollateralized loans against are:
- $wBTC (Wrapped Bitcoin)
- $WETH (Wrapped ETH)
- $MATIC (Polygon)
- $SHIB (Shiba Inu)
- $SUSHI (Sushi Swap)
- $PAXG (Pax Gold)
- $FTT (FTX Token)
- $LINK (Chainlink)
- $ZRX (0x Token)
- $SNX (Synthetix)
- $OCEAN (Ocean Protocol)
Here’s how it works:
Once you deposit assets into the platform, you may take out loans against your holdings. The amount you can borrow depends on the total value deposited in the collateral safe, the asset’s maximum borrowing capacity, and the asset’s loan-to-value ratio (LVR). $NMR’s current LVR in Fringe’s PLP is 65% — depositing $1000 worth of $NMR allows you to borrow up to 650 $USDC.
However, this doesn't mean that you should necessarily max out your loan limit. You should always consider potential volatility within crypto, your overall loan health and position before taking out a loan. Be sure that you're not putting yourself in a position of potential liquidation risk by borrowing too much.
Outstanding loans accrue interest continually. This interest, however, does not increase proportionally as your $NMR increases in value. This means that any gains from your $NMR position are entirely yours. If your $NMR drastically depreciates, your position may become undercollateralized and subject to liquidation. In other words, the platform will be allowed to sell an equivalent amount of your deposited $NMR plus a liquidation fee to settle your loan.
What is $NMR?
$NMR is an ERC-20 token that serves as the backbone of Numerai, a hedge fund that leverages the collective intelligence of artificial intelligence algorithms to invest in various global stock markets.
How to borrow $USDC with $NMR on Fringe Finance
You can get an instant $USDC loan with $NMR in five easy steps:
1. Go to Fringe Finance’s PLP and open the Borrow tab. You’ll need a MetaMask Wallet with the tokens you would like to use as collateral and some ETH to cover any fees.
6. That’s it! Your borrowed $USDC will be available in your wallet once the transaction is completed. You will now also be able to see your position’s health factor. Make sure to keep it overcollateralized to avoid liquidations!
How to repay your loan
You can repay your $USDC loan in three easy steps:
Learn more about Crypto Borrowing and Lending
About Fringe Finance
Fringe Finance is a decentralized money market designed to unlock the capital spread in crypto assets regardless of their capitalization and supported network. With a next-generation DeFi lending & borrowing ecosystem, Fringe aims to unlock the dormant capital from traditional financial markets and all-tier cryptocurrencies.
About Numerai
Numerai is a San Francisco-based hedge fund that utilizes artificial intelligence and crowdsourcing to invest in global stock markets. Founded in October 2015, Numerai leverages crypto incentives to create an institutional-grade market-neutral hedge fund.