Borrowing
Introduction to Borrowing
Borrowing on Fervent Finance allows users to access liquidity without needing to sell their assets. By supplying collateral, you can borrow other tokens to participate in DeFi opportunities, pay expenses, or leverage your positions — all while keeping exposure to your original holdings.
How Borrowing Works on Fervent Finance
When you supply assets to Fervent Finance, you can use them as collateral to borrow other assets.
Deposit collateral (e.g., KAS, stablecoins)
Borrow another asset up to a percentage of your collateral value
Pay interest on the borrowed amount until you repay
Borrowing is non-custodial, meaning you remain in control of your assets unless your position becomes undercollateralized.
Collateral Factor & Borrow Limits
Each asset has a defined collateral factor that determines how much you can borrow against it. For example:
KAS
70%
USDT
80%
If you deposit $1,000 worth of KAS and the collateral factor is 70%, your maximum borrow limit is $700. Borrowing more than this exposes you to liquidation risk if price fluctuates.
Interest Rates on Borrowing
Interest rates for borrowers are dynamic and depend on the utilization of each pool:
High utilization → higher borrow APR
Low utilization → lower borrow APR
Borrowers pay interest continuously, which is distributed to lenders supplying that asset.
Liquidation Risk
If your borrowed amount exceeds your allowed limit due to market volatility or accrued interest, your position becomes undercollateralized.
When this happens:
Your position can be partially liquidated by other users
Liquidators repay part of your debt and receive a portion of your collateral at a discount
This mechanism protects lenders and keeps the protocol solvent
To avoid liquidation:
Always maintain a healthy collateral ratio or repay/adjust your position during volatility
Benefits of Borrowing on Fervent
Access Liquidity Without Selling – Keep exposure to your long-term assets while borrowing
Non-Custodial & Permissionless – No central authority or account setup needed
Flexible Repayment – Repay anytime; no fixed loan duration
Leverage Opportunities – Use borrowed assets for yield farming, trading, or hedging strategies
Transparent Rates – Borrowing costs are fully transparent on the dashboard
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