Borrow

Borrowing tokens from Tydro allows users to unlock liquidity by using their supplied tokens as collateral, accessing capital without selling their assets. However, borrowers are exposed to liquidation risk if the value of their collateral drops below the required threshold.

Interest rates are set dynamically based on protocol parameters such as the borrow utilisation rate, which represents the percentage of total supplied liquidity currently borrowed, and internal configurations that direct incentives across markets. These parameters influence the effective rates earned by suppliers and paid by borrowers by adjusting how capital flows between the two sides of the pool. When utilisation increases, borrowing demand rises, causing interest rates to adjust upward to maintain balance and attract additional liquidity.

Each market operates with specific parameters designed to incentivise both borrowers and suppliers. To maintain a healthy ratio and avoid liquidation risk, borrowers should actively monitor their collateral levels. Tools like real-time LTV alerts help ensure borrow positions remain safely overcollateralised as markets move or interest accrues.