Collateralized Borrow Zap

Overview

Use any token to enter a lending market and take out a collateralized loan in a single transaction. Collateralized borrows enable you to source more liquidity for your strategy while maintaining full exposure to your collateral.

Your tokens are immediately swapped at the best available rates and added to the lending pool to earn supply interest. By collateralizing the asset lent, you can also take out a loan which incurs a borrow interest.

The maximum amount that you can borrow is determined by the collateralization ratio of the underlying lending pool. Please pay attention to the health factor of your position when borrowing to ensure that you do not lose funds through forced liquidations. Your position can be liquidated if the value of your debt exceeds the collateral value.

Potential Alpha

• Access More Capital: Get access to more liquidity while maintaining full exposure to your asset token plus added supply interest.

• Benefit From Price Divergence: Lend a bullish token and borrow stables or lend stables and borrow a bearish token to reduce your debt burden.

• Maximize Supply Interest: Not a single second is wasted as your newly acquired tokens are immediately added to the lending pool to earn interest.

Strategy Building Blocks

The building block order mirrors the Factor Studio UI and can be expanded for further strategy details and parameters.

Swap

• Select the token to swap from.

• Input the token amount.

Lend

• Lend the output tokens from the swap to the target lending market.

• The tokens which you can borrow will be determined by the underlying lending market.

Borrow

• Select the token to borrow.

• Input a borrow amount which includes a buffer for any price fluctuations.

Example