How to Borrow and Repay
With Collar, when you borrow an asset you are given a call option that gives you the right to repay your loan in order to retrieve your collateral at any time before the loan expires. The first step is choosing which collateral asset you want to use for your loan and which asset you want to borrow. Generally, you should use collateral that you feel confident in hodling and borrow an asset that you can use to get high APY in another protocol. Once you have decided, you are only a few steps away from borrowing with Collar!
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Borrowing Steps
Step 1: Go to collar.org and enter the app. Step 2: Connect your wallet to Collar (make sure your wallet is set to the Ethereum Mainnet and you have some ETH to cover gas fees). Step 3: On the "LOAN" tab, select the "Borrow" page. Then use the "Pair Selector" to choose your collateral asset (BOND) and asset to borrow (WANT). Step 4: Make a note of the "Expiry" of the loan. This is the deadline to repay your loan if you want to retrieve your collateral. You can use the "NewRound" toggle to switch to a later expiry date if you wish. Step 5: Click "Approve" and approve your tokens for trading. This step is only necessary the first time a particular asset is used with Collar and a small fee will be incurred. This fee goes to the Ethereum miners, not Collar, and it is required in order to interact with the Collar smart contracts. Step 6: Enter the amount of BOND tokens you wish to deposit or click "MAX". The amount of WANT tokens you will receive will be shown. The difference between the BOND amount and WANT amount is the interest you pay for the loan. Please read Loan Info below for important info about this interest. Step 7: Once you are ready, click "Deposit & Borrow". Step 8: Once the transaction is complete, you will receive your WANT tokens in your wallet automatically.
Loan Info
  • When you borrow, you receive a number of CALL tokens equal to the number of BOND tokens you deposited as collateral. These CALL tokens are the "call option" that give you the right to repay your loan. You can view your CALL tokens in the Collar Dashboard.
  • When you borrow, you pay interest upfront on the entire duration of your loan. If you repay the loan before expiry with COLL tokens, you will receive a refund in BOND tokens equal to the interest you would pay by taking out the same loan at the time of repayment.
  • The interest paid for a loan increases with borrow demand and decreases with lending supply and time.
When you repay your loan, you have the option of repaying with WANT tokens or COLL tokens. Repaying with COLL tokens is the method that gives you a partial refund on the interest you paid, so it is generally the preferred one and it is the method described below.
Repayment Steps
Step 1: Go to collar.org and enter the app. Step 2: Connect your wallet to Collar (make sure your wallet is set to the Ethereum Mainnet and you have some ETH to cover gas fees). Step 3: On the "SWAP" tab, select the "Lend" page. Then use the "Pair Selector" to choose the collateral asset (BOND) and the asset you borrowed (WANT). Make sure you are in the correct round for your loan; you can use the "NewRound" toggle to switch to a later expiry date if necessary. Before repayment, check the CALL token balance on the Collar dashboardโ€”it should be equal to the total amount of collateral you deposited for your loan. Step 4: Click "Approve" and approve your tokens for trading. Step 5: Enter the amount of WANT tokens to repay. The amount of COLL tokens you will receive will be shown, and this number is equal to the number of BOND tokens you will receive for your repayment. The maximum amount of WANT tokens you should repay is that which makes the amount of COLL tokens received = amount of CALL tokens for your loan. Step 6: Once you are ready, click "Lend". Step 7: Once the transaction is complete, you will receive your COLL tokens in your wallet automatically. Step 8: You can now go to the "LOAN" tab and select the "Repay" page to begin the repayment with the COLL tokens. Use the "Pair Selector" to choose the collateral asset (BOND) and the asset you borrowed (WANT). Make sure you are in the correct round for your loan by using the "NewRound" toggle to switch to a later expiry date if necessary. Step 9: Select "COLL" repayment underneath the "Selector Pair" and enter the amount of COLL tokens to repay with or click "MAX". Step 10: Once you are ready, click "Repay". Step 11: Once the transaction is complete, your CALL tokens will be burned and you will receive your BOND tokens in your wallet automatically.
  • Repaying using WANT tokens is the same process as above, except that you skip Steps 3-7 and select "WANT" repayment in Step 9.
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