Traditional Borrowing

PreviousHow to use Stacks Market to Borrow Assets NextE-Mode Borrowing

Last updated 1 day ago

Traditional Borrowing

Start by visiting and connecting your Stacks wallet. We currently support , , , , and .

Getting Started

Before you can borrow, you’ll need to supply an asset to be used as collateral. Please refer to How to use Stacks Market to Earn Yield.

Only assets with a green checkmark under the ‘Collateral’ column are eligible.

As of now, all assets on Zest Protocol are in isolation mode—meaning only one type of asset (e.g. stSTX, USDC, STX) can be enabled as collateral at any given time.

To change the enabled collateral asset:

Ensure you have no active borrowing positions
Disable the ‘Isolated’ toggle for your currently designated collateral asset and approve the transaction
Enable the ‘Isolated’ toggle for the new asset and approve the transaction

Borrowing Against Your Collateral

Once you've supplied collateral, ‘Borrow’ buttons will appear in orange under ‘Assets to Borrow’.

To proceed: – Find the asset you wish to borrow and click ‘Borrow’ – This will open the ‘Borrow $XYZ’ popup

In the Borrow $XYZ popup, a user can see how much they can borrow and the estimated liquidation price, which adjusts based on the amount they choose to borrow.

The liquidation price is the collateral asset price at which your collateral will get liquidated. If you get liquidated, you get to keep the asset you borrowed but you lose (potentially all of) your collateral.

Understanding the ‘Borrow $XYZ’ Popup 1) LTV (Loan-to-Value): The ratio between your borrowed amount and the value of your supplied collateral. Example: If you supply $1,000 and borrow $500, your LTV is 50%.

2) Max LTV: The maximum LTV allowed before borrowing is no longer permitted.

3) Liquidation Threshold: The LTV level at which your loan becomes unsafe, triggering the risk of liquidation. If your LTV crosses this threshold, your collateral may be partially or fully sold to repay your debt.

To learn more about liquidation, see:What Happens When I Get Liquidated?

When you have opened a loan, interest automatically accrues to your debt in the UI.

Health Factor

Once a borrow position is active, a Health Factor widget will appear in the UI. It provides a real-time view of your loan status by calculating your LTV dynamically.

The Health Factor ranges from 1 to 100, with values above 100 shown as ∞. You can click the tooltip next to the widget for more detail on liquidation risk parameters.

If your Health Factor drops below 1, your position will be eligible for liquidation. See [link] for more on liquidation: What Happens When I Get Liquidated?

Repaying your Loan

You can repay your loan in full or partially at any time by clicking ‘Repay’. Partial repayments reduce your LTV and lower liquidation risk. Entering an amount in the ‘Repay’ field will display your updated liquidation price.

Topping up Collateral

You can also reduce liquidation risk by supplying additional collateral.

To do this, deposit more of the asset you have enabled as collateral via ‘Assets to Supply’. The UI will display your new liquidation price.

Example: If you’ve enabled stSTX as collateral, you must supply additional stSTX to strengthen your position.

What Happens When I Get Liquidated?

By default, Zest allows borrowing up to 50% LTV.

Depositing $1,000 in collateral enables borrowing up to $500. If your LTV reaches 70%, your collateral becomes eligible for liquidation and incurs a 10% penalty fee.

If you're using E-Mode, the parameters are different (Up to 80% LTV, Liquidation triggered at 85% LTV, Reduced penalty of 5%). Read more about E-Mode: E-Mode Borrowing

There are 3 main scenarios in which liquidation may be triggered:

Scenario

Initial Collateral (STX)

Initial Loan (Asset)

What Changes?

When Liquidation Happens

Result After Liquidation

1. Interest builds up

$1,000

$500 in USDC

Interest increases loan balance (to $750 USDC)

LTV reaches 70% due to loan growing

Collateral liquidated to pay off $700 USDC loan + 10% penalty ($100 in STX) → $200 STX left

2. Borrowed asset goes up

$1,000

$500 in BTC

BTC increases 50% (to $750)

LTV reaches 70% due to borrowed asset rising

Liquidation + penalty unless more STX is added

3. Collateral drops in value

$1,000

$500 in BTC

STX drops 30% (to $700 collateral)

LTV exceeds 70% due to collateral falling

Liquidation + penalty unless more STX is added

PreviousHow to use Stacks Market to Borrow Assets NextE-Mode Borrowing

Last updated 1 day ago

Start by visiting and connecting your Stacks wallet. We currently support , , , , and .

Getting Started

Before you can borrow, you’ll need to supply an asset to be used as collateral. Please refer to How to use Stacks Market to Earn Yield.

Only assets with a green checkmark under the ‘Collateral’ column are eligible.

As of now, all assets on Zest Protocol are in isolation mode—meaning only one type of asset (e.g. stSTX, USDC, STX) can be enabled as collateral at any given time.

To change the enabled collateral asset:

Ensure you have no active borrowing positions
Disable the ‘Isolated’ toggle for your currently designated collateral asset and approve the transaction
Enable the ‘Isolated’ toggle for the new asset and approve the transaction

Borrowing Against Your Collateral

Once you've supplied collateral, ‘Borrow’ buttons will appear in orange under ‘Assets to Borrow’.

To proceed: – Find the asset you wish to borrow and click ‘Borrow’ – This will open the ‘Borrow $XYZ’ popup

In the Borrow $XYZ popup, a user can see how much they can borrow and the estimated liquidation price, which adjusts based on the amount they choose to borrow.

2) Max LTV: The maximum LTV allowed before borrowing is no longer permitted.

To learn more about liquidation, see:What Happens When I Get Liquidated?

When you have opened a loan, interest automatically accrues to your debt in the UI.

Health Factor

Once a borrow position is active, a Health Factor widget will appear in the UI. It provides a real-time view of your loan status by calculating your LTV dynamically.

The Health Factor ranges from 1 to 100, with values above 100 shown as ∞. You can click the tooltip next to the widget for more detail on liquidation risk parameters.

If your Health Factor drops below 1, your position will be eligible for liquidation. See [link] for more on liquidation: What Happens When I Get Liquidated?

Repaying your Loan

Topping up Collateral

You can also reduce liquidation risk by supplying additional collateral.

To do this, deposit more of the asset you have enabled as collateral via ‘Assets to Supply’. The UI will display your new liquidation price.

Example: If you’ve enabled stSTX as collateral, you must supply additional stSTX to strengthen your position.

What Happens When I Get Liquidated?

By default, Zest allows borrowing up to 50% LTV.

Depositing $1,000 in collateral enables borrowing up to $500. If your LTV reaches 70%, your collateral becomes eligible for liquidation and incurs a 10% penalty fee.

If you're using E-Mode, the parameters are different (Up to 80% LTV, Liquidation triggered at 85% LTV, Reduced penalty of 5%). Read more about E-Mode: E-Mode Borrowing

There are 3 main scenarios in which liquidation may be triggered:

Scenario

Initial Collateral (STX)

Initial Loan (Asset)

What Changes?

When Liquidation Happens

Result After Liquidation

1. Interest builds up

$1,000

$500 in USDC

Interest increases loan balance (to $750 USDC)

LTV reaches 70% due to loan growing

Collateral liquidated to pay off $700 USDC loan + 10% penalty ($100 in STX) → $200 STX left

2. Borrowed asset goes up

$1,000

$500 in BTC

BTC increases 50% (to $750)

LTV reaches 70% due to borrowed asset rising

Liquidation + penalty unless more STX is added

3. Collateral drops in value

$1,000

$500 in BTC

STX drops 30% (to $700 collateral)

LTV exceeds 70% due to collateral falling

Liquidation + penalty unless more STX is added