There are several things you can do to have a worry-free experience when borrowing crypto assets or stablecoins on Proton Loan. We have put together a few tips to help you along your Crypto-Loan journey.
Helpful Tips and Suggestions
- Loans have to be repaid in-kind, or in other words, in the asset that was borrowed. If you borrow XUSDC, then you have to repay in XUSDC. If you borrowed XBTC, then you have to repay in XBTC. This is important to keep in mind if you borrow crypto. If you borrow crypto and the market value rises, then you will need to repay your loan at the higher market value of the asset.
- Pay attention to your Loan Health. Loan Health is dependent on the ratio of your collateral value to your outstanding loans, and takes into account the LTV (Loan-to-value) of your collateral assets. If your Loan Health begins decreasing, you can increase it by adding more collateral deposits, or by repaying a portion of your loan. In some cases, it may be prudent to over-collateralize a loan, so the Loan Health exceeds 100% and lowers the chance of liquidation.
- Have a plan for repayment! Just like a traditional loan, you should have a plan for repayment either through regularly scheduled payment installments or waiting for market conditions to allow repayment. Your plan can include the liquidation of your crypto assets, but we don't want this to come as a surprise if liquidation is something you would like to avoid.
If you have any questions or suggestions, please contact us at firstname.lastname@example.org