Supplying and Borrowing

Supplying Assets

Chainflip Lending offers supply pools for supported assets. Liquidity suppliers deposit assets into these pools, which are then made available to borrowers.

Chainflip Lending uses a unified pool model: all supplied assets become collateral, and supplied collateral can be used in loans. This makes the lending product more attractive for both passive suppliers and borrowers, paired with utilisation caps that ensure full loan coverage when issuing new loans.

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.

For BTC, supply in the unified pool is also partially utilised to power Boosted swaps and deposits, earning additional Boost yield on top of lending interest. Because BTC supply powers Boosted swaps, BTC positions share the (extremely low) chain reorg risk that previously applied only to standalone Boost depositors. Positions in other assets are not affected.

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.

Under the unified pool model, supplied collateral is deployed into the pool and earns interest from loans taken out against it.

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:

1. Deposit collateral into the State Chain Loan Account
2. Open a loan in USDC, USDT, or another supported asset
3. Withdraw borrowed funds to any supported chain and wallet
4. Monitor loan health as market prices change
5. Repay partially or fully using funds held in the State Chain account
6. 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.