Envision Tren's borrowing feature as a means of turning your non-custodial wallet into a credit card. This allows for the immediate expenditure of stablecoins (trenUSD), with the flexibility to settle the payment at a later date
Get Started
Connect Wallet
Connect your non-custodial wallet to Tren Finance using a browser wallet such as Metamask or by using WalletConnect
Select Collateral
Choose an asset from the pools page to act as collateral for your stablecoin loan. This asset might be anything from your favorite meme coin to certain Real World Assets (RWAs) or even the LP tokens you hold from Uniswap.
Determine Loan Parameters
Afterward, make a choice regarding the amount of trenUSD you'd like to borrow. This can be a specific sum aligned with your borrowing needs or adjusted using the loan-to-value (LTV) slider. Sliding the LTV to 100% indicates borrowing the maximum amount feasible considering your collateral's value. For instance, if the asset has a maximum LTV of 70%, selecting the maximum borrowing (100%) with $10,000 collateral value would result in obtaining $7,000.
Lock Collateral and Issue Loan
By clicking on "approve" and "borrow," you lock in the specified amount of your chosen collateral in the smart contract, creating a Collateralized Debt Position (CDP). This collateral acts as security for the stablecoin loan. Subsequently, after the collateral is locked, the smart contract issues the borrowed stablecoins directly to the user's non-custodial wallet.
Managing Positions
Borrowers are required to repay the trenUSD loan at a later date. Interest accrues on the collateral amount over time instead of the loan like traditional protocols. The interest rate may be fixed variable or algorithmic depending on the pool your position is in.
If the value of the collateral falls significantly and the Collateralization Ratio breaches the specified threshold, the position will be subject to liquidation
Both the positions page and the asset-specific page where your position is located offer the same functionality, allowing you to effectively manage your current position using either. The guide covers how to manage your position from the position page
Deposit
Improve the health of your borrowing position by depositing more collateral. This lowers the risk of liquidation and, at the same time, increases your borrowing power, allowing you to confidently take another loan within the same position.
Withdraw
Utilize the withdraw function to take out collateral from your position. We advise you to use this feature when the value of your collateral assets has substantially increased, allowing you to retrieve a portion of your assets without significantly impacting the health factor of your position. With an existing loan, you cannot withdraw the entire collateral because there needs to be enough collateral to fulfill the collateralization requirements for the trenUSD loan.
Monitor how this feature affects your health factor to avoid the risk of liquidation.
Borrow More
Use the "borrow more" option to acquire another loan of trenUSD within the same position without having to add more collateral. The ability to borrow more trenUSD is linked to the increase in the value of your collateral assets, while a decrease in their value restricts this borrowing capability.
Monitor how this feature affects your health factor to avoid the risk of liquidation.
Repay
Utilize the repay feature to settle your trenUSD loan. Clearing the full loan allows you to retrieve your collateral assets in full and terminate the position. Repaying a portion of the loan increases your borrowing capability and enhances your health factor. Pressing the Repay button presents two available options.
Repay with trenUSD balance
If you decide to repay the loan from your wallet balance, it's essential to ensure you have an adequate amount of trenUSD in your non-custodial wallet. You can either choose to settle the entire loan by using the "max" button or make a partial repayment.
Repay with Collateral
Alternatively, you have the option to settle your trenUSD loan by using the value of your collateral. The protocol will sell your collateral for trenUSD to repay the loan, allowing you to withdraw the remaining collateral once the loan is settled.