Borrowing on Teller
On Teller, any crypto asset can be used as collateral for a loan:
ERC-20 tokens
Governance and LP tokens
Staked, locked, or vested tokens
and even NFTs
Why should I borrow?
Leverage unlocks liquidity.
Selling an Asset = $$$ - possible taxes - future value
Leveraging an Asset = $$$ + Yield + future value
How do I Borrow?
Borrowers can request a Custom Loan (OTC) or an Instant Loan.
Instant loan:
If a wallet meets the pool requirements, the wallet can borrow instantly from one, or multiple pools, using unlimited combinations of collateral. Loan terms, such as collateral required, duration, and yield, are pre-set by the lender or smart contract pool.
Custom Loan (OTC):
Any wallet can request a loan with custom terms by submitting an open offer to the protocol. The borrower can request specific loan terms, such as collateral allocated, duration, and yield. The loan request is submitted onchain, and can be filled by any liquidity provider.
Loan Terms:
Asset (USDC, DAI, wETH, etc)
Loan amount
Loan-to-Value Ratio (over, under, zero collateral)
Collateral details
APR
Payment schedule
Standard (principal + interest) or Balloon (interest only, until end of loan)
Daily, weekly, monthly
Loan duration
Use of Funds (optional)
Once an LP funds the loan, the capital can be used for a variety of on/off-chain purposes, including gaining liquidity, yield farming, investment opportunities, covering expenses, and more.
What collateral can I use?
any ERC-20 (tokens)
any ERC-721, ERC-721A (NFTs)
any ERC1155
any ERC-4626 (Tokenized Vaults)
any tokenized Real World Assets (RWA)
How much can I borrow?
The amount you can borrow is based on the following:
Liquidity Provider capacity
the specific money market terms (set by the pool owner)
the value of your collateral
Technically, there is no ceiling to the amount you can borrow.
When do I pay back the loan?
The time period of a loan depends on either the money market terms or the pre-set terms of a custom loan request.
Can I get liquidated?
There is no price-based liquidation. Teller uses a time-based liquidation model.
If the value of your collateral decreases in value, your loan remains active.
Traditional DeFi concepts like Health factor, pool isolation, and collateral range, are not used to trigger liquidations.
If a borrower fails to make a loan payment, the loan will default.
What happens if I default?
Teller defines default as:
failing to pay a scheduled repayment after the due date (or the grace period)
The grace period is set by the specific lending pool owner.
If a loan defaults, a liquidator or the lender can repay the loan on the borrower’s behalf and seize all of the collateral associated with the loan.
Can I pay back the loan early?
Sure.
Throughout the duration of your loan, you can make a variety of payments depending on your needs. Interest is only charged on the amount of principal outstanding, so repaying early will lower the total interest charged to your loan.
There are three payment options for every loan:
Minimum Payment - the required amount due for the current payment cycle
Pay the full amount - pays the full loan + outstanding interest
Pay custom amount - pays any custom amount
Tutorial videos
How to get an Instant Loan
How to extend a loan with a flash loan
How to repay a loan
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