How to Borrow

Borrowing on Chainflip requires collateral.

Before you can open a loan, the assets you want to use as collateral must be:

1. Deposited into your State Chain account
2. Moved into your collateral balance (a dedicated sub-account for securing loans)

Borrowing therefore works in three stages:

1. Deposit funds into your State Chain account
2. Transfer funds into your collateral balance
3. Open a loan against that collateral

Below is the full step-by-step process.

1. Connect Your Wallet

Start by connecting either:

• an EVM wallet (MetaMask, Rabby, etc.), or
• a Polkadot.js wallet

Connecting authenticates your State Chain account, where:

• balances
• collateral
• loans
• repayment logic

all live.

2. Deposit an Asset (Required Before You Can Borrow)

To borrow, your collateral must first exist inside the Chainflip system.

How to deposit:

1. Go to the Deposit section
2. Select the asset you want to use as collateral
3. Chainflip generates a native deposit channel
4. Send funds to the deposit address from any wallet or exchange
5. Once confirmed, your balance appears under Balances

This balance is not yet collateral — you must transfer it in the next step.

Supported native deposit channels

• BTC → Bitcoin
• ETH / USDC / USDT → Ethereum
• SOL → Solana

No bridging, no wrapping — all assets remain fully native.

3. Move Assets Into Collateral

Collateral is separate from your normal account balance.

You can move assets into your collateral balance from the Borrow tab using the Manage Collateral CTA.

Steps:

1. Open the Borrow modal
2. Click Add Collateral
   • This opens the Transfer Funds modal
3. Select the asset from your account balance
4. Enter the amount to move
5. Confirm

Once moved, the asset becomes collateral and can be used to secure a loan.

Important:

• Your first time borrowing requires adding collateral before opening a loan
• Collateral remains fully native and secured in Chainflip’s TSS vaults

4. Your Primary Collateral Asset (PCA)

Your Primary Collateral Asset (PCA) is selected automatically based on the first asset you move into your collateral account. You can change your PCA at any time from the Borrow tab.

The PCA is the preferred asset the protocol uses when:

• auto-top-ups trigger near liquidation thresholds (85%+ LTV)

Make sure your account balance has enough of your selected PCA to support automatic top-ups.

You can change your PCA at any time if you prefer a different asset to be used for top-ups.

5. Open a Loan

Once you have collateral:

1. Go to the Borrow section
2. Choose the asset to borrow (e.g., USDC, USDT)
3. Choose the loan amount or select the appropriate LTV
4. Confirm the loan

After confirming:

• After confirming, you’ll be taken to Borrow → My Position, where you can see your loan details, collateral levels, and repayment options.
• Borrowed funds appear in your State Chain account balance.
• They can be withdrawn at any time
• Interest accrues every 10 blocks, denominated in the borrowed asset

6. Withdraw Borrowed Funds to Any Chain

Borrowed funds can be withdrawn natively:

• USDC / USDT → Ethereum
• BTC → Bitcoin
• SOL → Solana

Withdrawals are executed through Chainflip vaults.

7. Manage Your Position

At any time, you can:

• Add more collateral
• Repay loans partially or fully
• Swap assets inside the State Chain account before repaying
• Withdraw excess collateral (as long as LTV remains healthy)

Your LTV updates every block based on oracle prices. Learn more in the Oracle documentation.

8. Repay Loans

You can repay using assets in your State Chain account balance.

Once your debt reaches zero:

• The loan closes automatically
• All remaining collateral becomes withdrawable