Introduction
0VIX allows users to borrow tokens against the value of funds that they have previously supplied. This is because by default all supplied assets are set as collateral. But, there is the option to disable, which is done manually.
Users can borrow from 0VIX easily. Additionally, borrowers have access to over-collateralized credit.
Borrowing Assets
This is done manually. All you need to do is
- Visit the webpage https://app.0vix.com/
- Connect your wallet
- Navigate to borrow market
- Click on the asset class you wish to borrow from
- Upon confirmation, the borrower is deemed successful and interest starts accruing
Borrow Limit
Due to the fact that 0VIX is a decentralized system, all its users are anonymous. So for the protocol to still be in business and not lose money, loans need to be over-collateralized. Thus, the term Borrow limit. which is the amount of assets a user is able to borrow based on the value of their supplied assets and their combined max Loan-to-Value ratios. Once the Borrow Limit is reached, the user cannot borrow any more.
Note: If the collateral value rises, the user can borrow some more.
If Whenever the collateral value falls or the interest accrued on the borrowed balance exceeds the liquidation threshold, the collateral is at risk.
Time period for loan repayments
There is no specified time period to repay loans. As long as the user’s position is safe, borrowing can be done for an undefined period
Health Factor
An asset’s safety is measured by its health factor, which is a numeric representation. Higher values indicate that the user’s funds are more secure from liquidation. And, a lower value indicates collateral and borrow risk.
How to Improve the Health Factor
The essence of improving the health factor is to be safe. So, always
- Repay a portion or the entire amount borrowed
- Provide additional collateral under “Supply”
Conclusion
The 0VIX Protocol is a decentralized lending service that can be used for reducing borrowing costs for individual or institutional users. Accessible through an easy-to-use interface, the protocol utilizes smart contracts to help manage loans and make it possible to offer lower rates of interest than current lending institutions. The 0VIX Protocol also reaps benefits from its use of blockchain technology and adds security and transparency into the process. By doing so, it has the potential to introduce many more individuals into cryptocurrencies in addition to offering more liquidity in this somewhat volatile market.
