In the ever-evolving landscape of decentralized finance (DeFi), innovative solutions are constantly being developed to unlock the value of digital assets in new and exciting ways. One such breakthrough comes from Fringe Finance, a cutting-edge DeFi lending platform that has recently expanded its offerings by integrating $SUSHI as a collateral option. This integration allows $SUSHI holders to leverage their investments for $USDC loans, providing a flexible financial tool without the need to liquidate their positions. This guide will walk you through the process of borrowing $USDC using your Sushi Swap tokens, opening up a world of possibilities for managing and maximizing your digital assets.
Fringe Finance, a pioneering and inclusive DeFi lending platform, has recently announced the integration of $SUSHI as an accepted form of collateral within its Primary Lending Platform (PLP). This strategic move empowers $SUSHI token holders with the ability to access stablecoin loans, specifically in $USDC, thereby unlocking the inherent value of their holdings without the necessity of selling their tokens. In the following sections, we provide a comprehensive tutorial on how to efficiently borrow $USDC utilizing your Sushi Swap tokens.
How do $USDC Loans Function?
Fringe Finance is dedicated to expanding its portfolio of altcoin assets eligible for use as collateral to secure $USDC loans. The platform's goal is to incorporate a broad spectrum of assets into the Fringe ecosystem, enhancing its utility and accessibility.
Currently, the platform supports instant $USDC overcollateralized loans against a diverse array of altcoins, including:
- $wBTC (Wrapped Bitcoin)
- $WETH (Wrapped ETH)
- $MATIC (Polygon)
- $SHIB (Shiba Inu)
- $SUSHI (Sushi Swap)
- $PAXG (Pax Gold)
- $FTT (FTX Token)
- $LINK (Chainlink)
- $ZRX (0x Token)
- $SNX (Synthetix)
- $OCEAN (Ocean Protocol)
The process is straightforward: On the Primary Lending Platform, deposit your altcoins as collateral. Throughout the loan duration, you retain complete control over your assets. Fringe’s PLP has undergone rigorous audits by HashEx and CyberUnit, ensuring the highest security standards in the cryptocurrency domain. Nevertheless, conducting personal research and acquiring comprehensive information before engaging with smart contracts is highly recommended.
The loan amount you're eligible to borrow is determined by the total value of the collateral deposited, the asset’s maximum borrowing capacity, and its loan-to-value ratio (LVR). For instance, $SUSHI's current LVR in Fringe’s PLP is 50%, meaning a deposit of $1000 in $SUSHI allows you to borrow up to 500 $USDC.
It's crucial, however, to approach borrowing judiciously. Consider the potential volatility within the crypto market, your overall loan health, and position before securing a loan. Ensure you're not exposing yourself to a high risk of liquidation by overborrowing.
Interest accrues on outstanding loans continuously. Importantly, this interest rate remains unaffected by any appreciation in your $SUSHI's value, ensuring that all gains from your $SUSHI position are yours to keep. Conversely, a significant depreciation in your $SUSHI's value could lead to your position becoming undercollateralized and at risk of liquidation.
What is $SUSHI?
SushiSwap operates as an automated market maker (AMM) decentralized exchange (DEX), a platform that utilizes smart contracts to create markets for any pair of tokens. AMMs are gaining popularity among cryptocurrency enthusiasts, with $SUSHI serving as the governance token that facilitates voting on platform developments.
How to Borrow $USDC with $SUSHI on Fringe Finance
Securing an instant $USDC loan with $SUSHI is a straightforward process, accomplished in five simple steps:
- Navigate to Fringe Finance’s PLP and access the Borrow tab. Ensure you have a MetaMask Wallet containing the tokens you wish to use as collateral, along with some ETH to cover transaction fees.
- Select the “Deposit” option adjacent to the Sushi Swap token and click “Enable”. MetaMask will prompt you to authorize a transaction to enable the deposit of $SUSHI into Fringe’s PLP, incurring a fee.
- Specify the quantity of SUSHI tokens you wish to deposit. Click “Deposit” and confirm the transaction via your MetaMask wallet, which generates fees.
- Click on $SUSHI’s “⋮” button to reveal the drop-down menu, then select “Borrow”.
- Input the desired $USDC amount you wish to borrow, ensuring the Health Factor remains well above 1 to mitigate
