Borrow FAQ

Frequently Asked Questions - Borrow

How Much Can I Borrow?

The amount you can borrow depends on a variety of factors. These include the value of your supplied assets, your available credit, and the level of available liquidity in the market. If there is insufficient liquidity or if your credit limit falls below a certain threshold, borrowing will not be possible. For more detailed information about the collateral parameters, please refer to the documentation provided.

Stability of Interest Rates

Unlike fixed-rate loans, the interest rates within the Moonwell protocol are highly dynamic, responding in real-time to fluctuations in market demand. Interest rate curves further define the relationship between supply, demand, and the resulting interest rate. These curves can be adjusted through governance proposals, allowing for community-driven refinements to better align with market conditions.

Due to the dynamic nature of these rates, vigilant monitoring of your available credit is essential. Failure to account for accumulating fees and fluctuating rates could jeopardize your loan, triggering a liquidation event.

Inability to Borrow an Asset

There are a few possible reasons why you may not be able to borrow a particular asset:

1. 0% collateral factor: This means that there is not enough liquidity on the blockchain to safely enable borrowing of the asset.

2. Insufficient liquidity: This means that there is currently not enough liquidity available. Waiting for more liquidity to be supplied will eventually allow you to borrow the asset.

3. Borrow Cap Reached: Every market on Moonwell has a "borrow cap", which is the maximum amount that can be borrowed from a market at a given time. If the borrow cap for a particular asset has been reached, users will be unable to borrow from that market until other borrowers repay their loans or the Borrow Cap has been adjusted.