Borrowing USDC with $BAND: A Guide

Fringe Finance, an all-new and inclusive DeFi lending platform, has integrated $BAND as a collateral type into its Primary Lending Platform (PLP). With Fringe’s PLP, token holders can take out $USDC loans against their altcoins. Now, $BAND holders will get access to stablecoin loans and will be able to unlock part of the value of their positions without selling their tokens.

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:

On the Primary Lending Platform, you can deposit altcoins to use them as collateral assets. You, and only you, maintain full control of your assets throughout the duration of your loans. Fringe’s PLP has been doubly audited by HashEx and CyberUnit; thus, it has the highest standard of security in crypto. Still, we always encourage users to do their own research and gather the necessary information to make informed decisions before dropping assets to a smart contract.

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:

*Note: These images are for illustrative purposes only. Values and tokens depicted in these images may vary from those shown on the Fringe Platform.

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.

2. Click the “Deposit” button on the right of the Band Protocol token and press “Enable”. Metamask will prompt you to confirm a transaction enabling the deposit of $BAND into Fringe’s PLP. This incurs a fee.

*Note: $wETH is depicted here for the purpose of this tutorial. Borrowing $BAND will follow the same processes described in this tutorial.

3. First, enter the amount of xtkn tokens you would like to deposit. Click “Deposit” and confirm the operation via your MetaMask wallet. This generates fees.

4. Click $BAND’s “ ⋮ ” button to open the drop-down menu, and then click “Borrow”.

5. Enter the amount of $USDC you want to borrow, taking care to keep the Health Factor as far from 1 as reasonable to avoid being liquidated. Click “Borrow” and confirm the operation via your MetaMask wallet. You’ll be charged a fee to complete this action.

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:

1. On the Borrow tab of the Fringe Finance’s PLP click “Repay”.

2. Enter the amount of $USDC you want to repay. Click “Repay” and confirm the operation via your MetaMask wallet. This incurs a fee.

3. After the successful confirmation of the transaction, your loan will be repaid. Hence, you will be able to withdraw your deposited $BAND by clicking “Withdraw”. Loans don’t need to be repaid all at once. You can pay off a loan progressively to release collateral over time.

Learn more about Crypto Borrowing and Lending

$BAND is one of the altcoins that can be used as collateral to get an instant loan on Fringe Finance. You can check other accepted altcoins on our Primary Lending Platform, alongside the $USDC lending functionality that allows you to effortlessly earn interest on your $USDC. If you’d like to learn more, see the Fringe Finance Whitepaper, or browse through the Fringe Finance Documentation.

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.

For more information on Fringe Finance, visit our website.

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.

For more information, please access their website.