Supplying and Borrowing
Supplying Assets
Chainflip Lending offers supply pools for supported assets. Liquidity suppliers deposit assets (most commonly USDC or USDT) into these pools, which are then made available to borrowers.
All supply activity is per pool: users lend to a collective pool, not to individual borrowers. Interest and fees generated by borrowing activity are accrued to the pool and automatically increase the value of each supplier’s share of the pool over time. No manual claiming is required, yields auto-compound.
Suppliers use their Chainflip State Chain account to deposit assets directly from any supported EVM wallet. Deposited funds begin earning yield immediately based on pool utilisation and interest accrual.
Supply-side risk is isolated per asset. Supplying USDC exposes the user only to USDC borrower risk and cannot be impacted by the behaviour of other markets.
Borrowing Assets
Borrowers deposit collateral, typically BTC or ETH, but any supported collateral asset may be used, into their Chainflip State Chain account. This collateral can then be used to open one or more loan positions.
Chainflip supports multi-collateral accounts, with loan health and liquidation behaviour determined using a per-account loan-to-value LTV ratio based on oracle prices.
The protocol supports an optional auto–top-up feature. If a borrower specifies a top-up asset, the system can automatically add that asset to their collateral whenever their LTV approaches unsafe levels.
Auto–top-up is controlled at the account level, users may enable or disable it at any time.
Although the protocol supports automatic top-ups, auto-top-up will be disabled by default during the closed beta phase. This ensures testers do not unintentionally use their account balance to top up collateral during aggressive LTV conditions.
The top-up asset configured by the borrowers determines which asset the protocol will use for automatic top-ups.
- This allows users to control exactly which asset should be consumed during auto-top-up events.
- Setting a primary collateral asset is optional and can be done at any time.
Collateral Management
Borrowers can:
- Add collateral at any time
- Withdraw excess collateral when safe
- Partially repay loans
- Collateral balances cannot be swapped directly; assets must be transferred back to your account (free) balance before swapping.
Minimum collateralisation rules apply at loan creation. Additional collateral can always be added later to improve loan health. For multi-collateral setups, Chainflip combines the oracle value of all collateral asset balances to determine the account’s overall LTV.
Borrowing Lifecycle
A typical borrowing flow:
- Deposit collateral into the State Chain Loan Account
- Open a loan in USDC, USDT, or another supported asset
- Withdraw borrowed funds to any supported chain and wallet
- Monitor loan health as market prices change
- Repay partially or fully using funds held in the State Chain account
- Withdraw remaining collateral once the loan is closed
Loan interest accrues in the borrowed asset and updates every 10 blocks. Lenders always receive interest in the asset they have supplied.
Repayments
Borrowers may repay debt at any time using:
- balance in their State Chain account
- assets swapped internally on the Chainflip DEX prior to repayment
Repayment reduces outstanding debt and improves LTV. When the debt reaches zero, the position closes automatically and all remaining collateral becomes withdrawable.