Open a Borrow position
How to open a Borrow position with Ajna Lite UI
Last updated
How to open a Borrow position with Ajna Lite UI
Last updated
Oazo Apps 2023
To open a permissionless UI Borrow position, first you need to find the pool that you want to Borrow in.
To do this, you need to go to our Ajna pool finder.
Here you have three input options, You can:
Input the Ajna Pool Address (find them here)
Input the Collateral Token name, symbol or contract address, this is the token that you want to deposit and use as collateral to borrow against
Input the Quote Token name, symbol or contract address, this is the token that you want to borrow
This will return the Ajna pools that match the search criteria. From here, you can select the pool you want to borrow from.
Once you have found your pool, you need to create your position. The interface will ask you to input the amount of collateral token you wish to deposit and the amount of quote token you wish to borrow. The amount you can borrow will depend on a few factors. First, the amount of collateral you are willing to deposit, the more collateral you deposit, the more you can quote token you can borrow. Second, the amount of liquidity available in the pool, this is the amount of quote token that lenders have deposited that is currently unutilized by other borrowers. Third, the lending price that lenders are willing to let borrowers borrow at.
When creating your Borrow position, the interface will provide you with data that will inform you on your position's health and your liquidation risk.
There are some properties of the Ajna protocol that should be understood when creating an Lite UI Borrow Positions. Threshold Price
The loan's threshold price, TP, can be calculated by taking the debt token amount and dividing it by the collateral token amount.
TP = debt amount / collateral amount
Your loan will be eligible to be kicked into the liquidation queue if the pool's Lowest Utilization Price (LUP) is less than your Threshold price. Just because your loan is eligible for liquidation, does not mean it will be profitable for liquidators to kick off a liquidation auction.
However, if you want to be sure to avoid liquidation, always ensure your TP < LUP
Lowest Utilization Price (LUP) The LUP is a pool-level value, the price of the marginal (lowest priced and therefore least aggressive) lender matched with a borrower. It is an essential concept in the Ajna Protocol, used to determine interest rate calculations, liquidation thresholds, borrowing thresholds and other things. As a Borrower your primary concern is it’s impact on Borrowing thresholds, as you can only Borrow from a pool if you are willing to above the LUP, and liquidation thresholds. As mentioned above, you must monitor your position’s threshold price against the pool’s LUP. Remember the Pool’s LUP can change based on the market, whilst you remain in control of your threshold price.
Liquidation Price
In the Ajna protocol, this is referred to as the Neutral Price. If the liquidation auction yields a value over the Liquidation Price, the kicker forfeits a portion or all of their bond.
If the liquidation auction yields a value below the Liquidation Price, the kicker’s bond is returned to them with profits from the auction. You can find out more about the Ajna liquidation mechanism here
Once you have created your Ajna Borrow position you can manage your collateral and manage your debt. You can manage your collateral by selecting ‘Manage Collateral’ from the sidebar drop-down.
Here you have two options, deposit collateral or withdraw collateral.
When depositing collateral, you can also borrow more debt. When withdrawing collateral, you can also repay some debt.
Simply enter the amounts in the relevant input boxes. You will see the interface update with green values which simulate how your position will look after you submit the transaction.
Again, selecting this option from the sidebar drop-down will give you two ways to manage your position debt. Borrow debt or pay back debt. When you borrow more debt, you can also deposit more collateral, when you pay back debt, you can also withdraw collateral. As on the manage collateral screen, your position values will be simulated based on your input values.
