> For the complete documentation index, see [llms.txt](https://docs.binkbtc.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.binkbtc.com/core-features/borrow.md). # Borrow ### Overview Bink allows you to access instant liquidity by borrowing USDC stablecoins against your Bitcoin—without selling your BTC. This means you can spend, invest, or use dollars while maintaining your Bitcoin position and continuing to benefit from potential price appreciation. The borrowing is powered by [Dolomite](https://dolomite.io/), a leading DeFi lending protocol, and uses your Bitcoin as collateral. Your BTC is automatically converted to stBTC in the background to optimize interest rates, enabling you to borrow at some of the most competitive rates in DeFi. *** ### Why Borrow Instead of Sell? #### Maintain Bitcoin Exposure When you borrow USDC against your Bitcoin instead of selling: * ✓ **Keep your Bitcoin** - Your BTC remains yours; you're not exiting your position * ✓ **Benefit from appreciation** - If Bitcoin's price increases, you capture the full upside * ✓ **Access liquidity** - Get dollars to spend immediately without triggering a taxable event (subject to jurisdiction) * ✓ **Continue earning yield** - Your collateral continues earning stBTC yield while borrowed against #### Tax Efficiency In many jurisdictions, borrowing against assets is not a taxable event, whereas selling Bitcoin triggers capital gains tax. Borrowing lets you access liquidity while deferring tax liability until you actually sell. *** ### How Borrowing Works #### Collateral and Conversion When you initiate a borrow: 1. **Bitcoin from Available Balance** is used as collateral 2. **Automatic conversion to stBTC** happens in the background to secure the best rates 3. **stBTC continues earning yield** while serving as collateral 4. **USDC is borrowed** and added to your Available Balance for immediate use You'll see three Bitcoin balances tracked in your account: * **Available BTC** - Ready to use for any purpose * **Savings BTC** - Earning base yield in the vault * **Collateral BTC** - Locked as collateral for loans (shown under your loan details) #### Loan-to-Value (LTV) Ratios The amount you can borrow depends on your collateral value and the protocol's risk parameters. **Borrowing Power:** * You can borrow up to **\~30% of your collateral value** * Example: $10,000 in BTC collateral → Can borrow up to \~$3,000 USDC {% hint style="info" %} **Why is the LTV so low?** In order to avoid liquidations, we decided to set the LTV ratio to 0,3. {% endhint %} #### Interest Rates **Borrow Rate** * Algorithmically determined based on supply and demand * Variable rate that adjusts with market conditions * Among the lowest rates available in DeFi **stBTC Yield** * Your collateral continues earning this yield * Generated from Botanix network gas fees * Offsets and exceeds your borrowing costs **Net Borrow Rate** * The difference between what you earn and what you pay sions. *** ### Liquidation Protection (Coming soon) #### What Is Liquidation? Liquidation occurs when the value of your collateral falls too low relative to your borrowed amount, threatening the ability to repay lenders. To protect the protocol and lenders, a portion of your collateral is automatically sold to repay the loan. #### What Is Liquidation Protection? Coming soon #### How Does Liquidation Protection Work? Coming soon *** ### Repaying Your Loan #### Flexible Repayment You can repay your loan at any time, in full or in part: **Full Repayment:** * Repay the entire borrowed amount * All collateral is unlocked and returned to your Available Balance * No fees for early repayment **Partial Repayment:** * Repay any amount to improve your health factor * Reduces your interest costs * Frees up borrowing capacity for future use #### How to Repay 1. Ensure you have USDC in your Available Balance 2. Navigate to your active loan 3. Enter repayment amount 4. Confirm transaction 5. Your collateral is proportionally unlocked The repayment process is instant, and you can reborrow immediately if needed. *** ### Frequently Asked Questions **Q: What happens to my Bitcoin when I borrow?** A: It's converted to stBTC and locked as collateral. It continues earning yield during this time and is returned to you when you repay the loan. **Q: Can I add more collateral to an existing loan?** A: No. Currently we limit borrowing up to 30% of the collateral value as this is deemed safe for not being liquidated. There is no health factor to be monitored. **Q: What if Bitcoin's price drops significantly?** A: As long as it does not drop more than 70% at the time of your loan, there is no risk. **Q: Can I have multiple loans at once?** A: No. We gather everything under 1 loan. **Q: Is my Bitcoin safe as collateral?** A: Your BTC is held in audited smart contracts. However, smart contracts always carry some degree of risk. **Q: Can I borrow other assets besides USDC?** A: Currently, Bink focuses on USDC borrowing as it offers the most stable and favorable rates. Other assets may be added in the future. **Q: What's the minimum I can borrow?** A: There's no strict minimum, but gas fees make very small loans inefficient. Generally, borrowing at least $100-500 makes economic sense. *** ### Getting Started Ready to access liquidity while keeping your Bitcoin? 1. **Ensure you have Bitcoin** in your Available Balance 2. **Navigate to the Borrow section** from your home screen 3. **Enter the amount** you wish to borrow 4. **Review the terms** - collateral needed, interest rates, net borrow rate 5. **Confirm** - Your BTC is converted to stBTC and locked, USDC is borrowed to your Available Balance For step-by-step instructions, see our Borrowing Tutorial.