This guide walks you through borrowing assets from Zentra using your crypto as collateral. Borrowing allows you to access liquidity without selling your holdings.
When you borrow from Zentra:
Deposit collateral (e.g., wcBTC)
Borrow other assets (e.g., USDC)
Pay variable interest over time
Earn ZNT rewards that often offset borrowing costs
The Flow:
Supply wcBTC as collateral ($10,000)
Borrow USDC against it ($7,500)
Earn ZNT rewards while borrowing
Before you begin, ensure you have:
✅ Wallet connected to Citrea network
✅ Collateral assets (wcBTC or USDC)
✅ Small amount of cBTC for gas fees
Step-by-Step Guide
Step 1: Supply Collateral
First, you need to supply assets that will serve as collateral.
Click "Supply" on your chosen collateral (e.g., wcBTC)
💡 If you already have supplied assets, skip to Step 2.
Step 2: Enable as Collateral
Your supplied assets must be enabled as collateral.
Toggle "Use as Collateral" to ON
Step 3: Check Borrowing Power
Once collateral is enabled, view your borrowing capacity.
Borrowing Power Formula:
Example:
Collateral: 0.2 wcBTC = $10,000
Borrow Limit: $10,000 × 0.75 = $7,500
Step 4: Borrow Assets
Go to "Markets" or "Borrow" section
Find the asset you want to borrow (e.g., USDC)
Review Before Confirming:
Step 5: Review Health Factor
Before confirming, check your Health Factor:
Step 6: Confirm Borrow
Review transaction in wallet
Step 7: Receive Funds
After confirmation:
Borrowed USDC appears in your wallet
Dashboard shows your borrow position
Managing Your Borrow Position
Monitor Health Factor
Check your Health Factor regularly:
Health Factor Formula:
Example:
Collateral: $10,000 × 80% = $8,000 effective
HF: $8,000 / $5,000 = 1.60 ✓
If Health Factor Drops
Repaying Your Loan
Step-by-Step Repayment
Enter amount (or "Max" for full repayment)
Repayment Example:
Remaining Debt: 2,500 USDC
New Health Factor: 1.60 → 3.20
Partial vs Full Repayment
Understanding Borrow Costs
Variable rate based on pool utilization:
Net Borrow Cost
Often, ZNT rewards exceed borrowing costs:
Net Cost = Borrow Interest − ZNT Rewards
Example:
Net APY: -4% (you're EARNING to borrow!)
Common Use Cases
1. Access Liquidity
Situation: Need cash, don't want to sell BTC
Action: Supply wcBTC, borrow USDC
Result: Get USDC while keeping BTC exposure
2. Leverage Long
Situation: Bullish on BTC
Action:
(Optional) Supply new wcBTC
Result: Amplified BTC exposure
⚠️ Risk: Amplified losses if BTC drops
3. Earn Net Yield
Situation: Want yield without selling
Action: Supply wcBTC, borrow USDC, use USDC elsewhere
Result: Earn ZNT rewards that exceed borrow cost
Safety Checklist
Before borrowing:
✅ Understand liquidation risk
✅ Check current Health Factor
✅ Plan for price volatility
✅ Know how to add collateral quickly
✅ Have funds ready for emergencies
✅ Don't max out borrowing power
Q: What happens if my Health Factor goes below 1?
Your position can be liquidated. Up to 50% of your debt is repaid by liquidators, and you lose collateral plus a penalty.
Q: Can I borrow the same asset I supplied?
Yes, but it's usually not useful since you already have that asset.
Q: Is there a deadline to repay?
No deadline. Repay whenever you want. Interest accrues over time.
Q: What if I can't repay?
Add collateral to keep HF above 1. If HF drops below 1, liquidation occurs automatically.
Q: How often does interest accrue?
Interest accrues every block. Your debt balance increases continuously.
Last updated 2 months ago
