Lending is now live!
Earlier this week, we announced the upcoming launch of the first decentralized lending network on Fuse Network. The service runs on top of the Ola Finance lending protocol adopting the configurations discussed in our previous article.
In what follows, we provide you with a brief overview of how to supply our digital assets including FUSE, WETH, WBTC and USDC.
You can access the network interface via the Ola Finance app here.
Supplying and withdrawing liquidity.
In order to use the service one first needs to supply tokens to the network. This can be using the Metamask wallet extension.
Once your Metamask is connected, you will be able to see more information about the network and your position in it (your wallet balances, supply balances, borrow balances, APY, etc.).
The screenshot below shows the situation when one has just connected to the app without having interacted with it before.
You may see that the supply and borrow balances are zero, as they should be at this stage. The “Net APR” rate is the difference between the APR you may currently expect to receive from the collateral you supplied to the network and the APR you may expect to pay from the loans you have taken. It will be positive if you can expect to earn interest on net and negative, otherwise.
The “Supply Markets” side is dedicated to depositing funds into and withdrawing them from the network. It contains the names of tokens that you can supply, their current supply APY, and your connected wallet’s balance in those tokens. The latter indicates the amount of the relevant tokens in your wallet that are not currently locked.
Once you have chosen the token you would like to supply, you will need to press on it and use Metamask to approve it. Then, you will be able to make the deposit, as shown on the image below.
If you want to redeem the tokens that you supplied, you just need to press on the relevant token again on the left side of the “Markets” table and choose the amount you wish to withdraw. Note that if your tokens are being used as collateral for a loan at the moment you attempt to withdraw them, you may not be able to withdraw all of them right away.
Once you have supplied liquidity to the network, you may choose to enable it as collateral to take a loan. The image below shows how to execute this within the lending interface.
Now that you have supplied liquidity, and enabled it as collateral, you can borrow tokens against it. Press on the token that you want to borrow, and a pop-up will show up.
Borrowing is based on overcollateralization (see collateralization factor here). This means that in order to take out a loan, a collateral of a higher value must be provided, first. To find out the maximum dollar value you can borrow with a given amount of a collateral asset, you need to multiply it by the asset’s collateral factor. The collateral factors for each of the supported assets can be found by clicking on the “Markets’’ tab. The application also enables you to choose a maximum safe amount. It is recommended that you do not exceed the maximum safe amount to reduce liquidation risk. You can read more about position liquidations on Fuse Lending Network in our previous article.
The borrowing popup (see above) allows you to choose the number of tokens that you want to borrow. You can also press the “max safe” button. This will automatically fill in an amount equal to 60% of the maximum amount you can borrow. In any event, the protocol will not allow you to borrow above the borrow limit for your asset.
Borrowers should bear in mind that loans on the lending network accumulate interest with each Fuse Network block and that the interest is compounds over time. This implies that to repay and close your position, you will need a higher amount of tokens than the one that you borrowed with time.
If you want to wholly or partly repay an outstanding loan, you simply need to press on the relevant token on the right side of the network’s “Markets” page, choose the amount you would like to repay and repay the loan amount and accumulated interest.
This article contains only a short overview of how to use Fuse Lending Network. We highly recommend reading the Ola wiki and doing your own research to gain a better understanding of how the protocol works and the risks you take when using it.
Users should also note that lending on Fuse is still in beta, which means that it may contain bugs and vulnerabilities. Users are advised to only supply funds that they are prepared to lose to the network.