Borrowing

Pluz Finance offers a robust borrowing platform that enables users to leverage their collateral for greater yield opportunities. By borrowing against assets such as WETH or USDC, users can maximize their participation in DeFi protocols within the Scroll ecosystem.

How to Borrow

To borrow on Pluz Finance, follow these steps:

1. Collateralize Assets: Deposit WETH or USDC as collateral. This collateral determines the maximum amount you can borrow.

2. Borrow Funds: Based on the collateral, borrow up to 3x the value of your deposited assets.

3. Utilize Borrowed Funds: Deploy borrowed assets in various DeFi strategies to enhance your yield.

Borrowing Mechanics

Collateralization Ratio

The collateralization ratio is crucial in maintaining the security of the borrowed funds. This ratio is calculated as follows:

Collateralization Ratio=Value_of_Collateral / Vaule_of_BorrowedFunds

A higher ratio indicates a safer loan, while a lower ratio increases the risk of liquidation.

Interest Rates for Borrowing

Interest rates on borrowed funds are dynamically adjusted based on the supply and demand within the Pluz Finance ecosystem. The rates are designed to balance the needs of borrowers and lenders, ensuring a healthy and efficient market.

Example Scenario

If a user deposits $1,000 worth of WETH as collateral and the platform allows a 3x borrowing leverage, the user can borrow up to $3,000 worth of assets. This borrowed amount can then be used in various DeFi strategies to earn higher yields.

Risk Management

Pluz Finance employs multiple layers of security and risk management strategies, including:

• Automated Liquidation: Ensures under-collateralized loans are promptly liquidated.

• Insurance Fund: Provides an additional layer of security against potential losses.

• Regular Audits: Conducted by leading firms to ensure the integrity of smart contracts.