Comprehensive Guide to Staking and Borrowing: Earn Liquidity While Holding Assets

Staking Borrowing is an over-collateralized lending service that provides solutions for investors seeking flexible capital allocation. This service allows users to obtain loans by collateralizing their existing digital assets without selling them, making it especially suitable for those optimistic about asset appreciation and wishing to hold long-term. Whether you need short-term liquidity to seize market opportunities or want to leverage more funds for investment, staking borrowing offers a flexible and efficient solution.

What is Staking Borrowing? A New Way to Unlock Asset Value

The core idea of staking borrowing is to let assets serve a dual purpose: retain ownership and appreciation potential of the original assets while obtaining immediate usable funds through collateralization. Users choose to collateralize their existing cryptocurrencies, and the lending platform issues corresponding loan amounts based on this. This model is particularly suitable for:

• Optimistic about future appreciation but need cash flow: Investors believe their assets will increase in value but also require funds to participate in other investments or cover urgent expenses.
• Optimizing capital efficiency: Multi-asset collateral support allows users to flexibly combine collateral assets, improving capital utilization.
• Reducing holding risks: No need to sell assets outright, avoiding hasty decisions in volatile markets.

Five Major Advantages of Staking Borrowing

1. Seamless Access to Liquidity
Explore new investment opportunities without selling your crypto assets. Users maintain the integrity of their investment portfolio, waiting for asset appreciation while using borrowed funds to respond flexibly to market opportunities.

2. Flexible and Diverse Collateral Options
The platform supports multiple cryptocurrencies as collateral, allowing users to adjust collateral amounts freely according to their needs. This flexibility effectively reduces the risk of forced liquidation, giving users greater peace of mind in managing their positions.

3. Maximize Capital Efficiency
Using a full-margin mode, all collateral orders are combined for calculation, significantly enhancing capital utilization. It also simplifies risk management processes, as users do not need to manage each order separately, making overall operations more convenient.

4. Full Control Over Funds
Borrowed cryptocurrencies are unrestricted—they can be used for various trading strategies within the platform or withdrawn to external wallets or other platforms at any time. This freedom allows users to allocate their funds flexibly based on their needs.

5. Flexible Repayment Arrangements
Supports a pay-as-you-borrow mechanism, allowing users to repay at any time without adhering to fixed repayment schedules. Users can choose to repay early or continue borrowing, entirely based on personal requirements.

Spot Borrowing vs. Fixed-term Borrowing: Choosing the Right Option

Staking borrowing offers two lending modes to meet different investor needs.

Spot Borrowing is a flexible lending scheme. Interest rates are updated hourly and compounded, ensuring that rates always reflect market conditions. This mode is especially suitable for investors with unpredictable cash flow needs—they can increase or decrease their borrowing at any time, adjusting as needed. The platform acts as the lender, ensuring stability and convenience.

Fixed-term Borrowing (also called Deposit & Loan) provides more certainty. Both parties agree on an interest rate in advance, which is locked in when the order is confirmed. Fixed-term borrowing supports various durations—7, 14, 30, 60, 90, or 180 days—allowing investors to choose based on their capital plans. It also offers a 24-hour grace period, during which interest is calculated at three times the hourly rate, providing ample buffer time for borrowers. Additionally, fixed-term borrowing supports early repayment (interest paid is non-refundable) and renewal options, offering greater flexibility.

Key Risk Management Parameters: Collateral Ratio and Liquidation Mechanism

To protect both lenders and borrowers, staking borrowing employs a scientific risk control system. The most critical indicator is the Loan-to-Value (LTV) ratio, calculated as total borrowed amount divided by total collateral value.

The risk management system is divided into four stages:

• Initial Collateral Ratio 80%: The maximum amount a borrower can borrow, equal to 80% of the collateral value.
• Warning Collateral Ratio 85%: When the ratio reaches this level, the system issues a risk alert to the borrower.
• Delayed Liquidation 93%: Entering a delayed liquidation phase, the borrower should take immediate action (add collateral or reduce borrowing).
• Forced Liquidation Collateral Ratio 95%: If the ratio reaches this level and no action is taken, the platform will execute forced liquidation to prevent systemic risk.

In the full-margin mode, both spot and fixed-term borrowing orders are combined for collateral ratio calculation, meaning all user positions are under unified risk monitoring. This design balances borrower flexibility with effective risk control, ensuring stable market operation.

Repayment and Renewal Options for Staking Borrowing

Spot Borrowing employs a manual repayment method, allowing borrowers to decide repayment timing and amounts based on their circumstances.
Fixed-term Borrowing automatically converts to spot borrowing upon maturity, and borrowers can choose to continue manual repayment or renew the loan. This design ensures borrowers always have full flexibility.

Note that main accounts and sub-accounts share the same borrowing limit, simplifying multi-account management. Whether in spot or fixed-term mode, users can flexibly use their approved borrowing capacity across accounts.

Overall, staking borrowing provides a secure and efficient liquidity solution through flexible collateral mechanisms, diverse borrowing options, and comprehensive risk management. Whatever your investment style, it helps you maintain asset ownership while maximizing the value of your funds.