Borrowing Flow

  1. Deposit Collateral: Choose a supported asset and deposit it into your Paydax vault (an interaction with the LendingPool smart contract). You retain ownership, and all transactions are transparent on the blockchain.

  2. Borrow Assets: Based on the collateral deposited and the fixed LTV for that pair, borrow the desired blue-chip cryptocurrency (e.g., borrow USDC using ETH, or borrow ETH using PDP). The system handles all token transfers through secure smart contracts.

  3. Maintain Health Factor: Continuously monitor your Health Factor (calculated by the CollateralManager). If it drops below 1.0, your position is eligible for liquidation. A 5% penalty applies, and up to 50% of your position can be liquidated to bring the HF back to a safe level.

  4. Repay and Unlock Collateral: Repay the borrowed asset plus accrued simple interest (compounded at repayment). Once the debt is cleared, your collateral is fully unlocked from the LendingPool contract.

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