Borrow

By supplying supported assets as collateral within Purrlend, users establish a collateralized position that enables the borrowing of additional tokens. Borrowing capacity—defined by parameters such as the Loan-to-Value (LTV) ratio—is determined by the protocol’s risk configuration, with interest accruing according to the active rate model.

Borrowing Mechanics A borrow position can be opened once collateral has been deposited into the protocol. The maximum amount that can be borrowed is determined by:

• The oracle-based valuation of the deposited collateral

• The risk parameters assigned to the specific collateral asset

• The available liquidity of the asset being borrowed

Risks Associated With Borrowing Borrowing introduces protocol and market risks that can escalate during periods of volatility. Liquidation Risk: If a position’s Health Factor declines below 1, the protocol may liquidate part or all of the collateral to repay outstanding debt, potentially resulting in significant losses to the borrower.

Borrow Caps Borrow caps specify the upper limit of a given asset that may be borrowed from the protocol. They act as a protective measure against scenarios—such as price manipulation or oracle exploits—where excessive borrowing could threaten protocol solvency, including through flash loan–enabled attacks. Configuring a borrow cap is optional, and its value is typically determined by factors such as the asset’s on-chain liquidity profile and the aggregate borrowed amount within the pool.