Below, we’ve prepared a short tutorial on how to borrow $USDC with Band Protocol 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). $BAND’s current LVR in Fringe’s PLP is 61% — depositing $1000 worth of $BAND allows you to borrow up to 610 $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 $BAND increases in value. This means that any gains from your $BAND position are entirely yours. If your $BAND 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 $BAND plus a liquidation fee to settle your loan.
What is $BAND?
Initially launched as an ERC-20 token on Ethereum, $BAND has since migrated to its own blockchain. As a cross-chain data oracle platform, $BAND facilitates the aggregation and connection of real-world data and APIs to smart contracts, making it a versatile cryptocurrency with potential applications in various industries.
How to borrow $USDC with $BAND on Fringe Finance
You can get an instant $USDC loan with $BAND 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 Band Protocol
Band Protocol provides a secure, blockchain-agnostic, decentralized oracle framework for Web 3.0 applications. It connects smart contracts with trusted off-chain data and ensures data integrity through token economic incentives, effectively creating a trusted information bridge between the Web 2.0 and the Web 3.0 of the future.