Repay Loans & Withdraw

How to repay loans and withdraw positions

Repay

Repayment improves the health factor of a position by increasing the collateralization ratio. By reducing the outstanding debt relative to the collateral posted, repayment lowers liquidation risk and may allow borrowers to safely withdraw a portion of their collateral.

Withdraw

Tydro allows suppliers to withdraw their supplied tokens, including accrued interest, as long as there is sufficient unborrowed liquidity in the reserve. The withdrawal amount is limited by the available underlying assets, and that the user’s ability to maintain a sufficient collateral ratio for their borrow position.

Periphery features such as collateral and debt swaps allow users to redeem their supplied liquidity in a different token, providing more options for efficient asset management.

When withdrawing with an active borrow position, it’s crucial to maintain a healthy collateralization ratio to avoid liquidation. Reducing collateral can lower the health factor, increasing the risk of liquidation. To remain safe, after the withdrawal, the account must stay above the liquidation threshold parameters. Therefore, withdrawals require careful management and consideration of the overall borrow positions to avoid liquidation.