Skip to main content

⬅️ Borrowing

Learn how to access instant liquidity using your NFTs and tokens as collateral.

Overview​

Levvy offers borrowers the opportunity to access liquidity promptly through a competitive lending system. Lenders compete to provide the highest loan-to-value ratio (LTV), ensuring you get the best possible terms.

How Borrowing Works​

1. Collateral Locking​

Once you accept a loan offer:

  • Your tokens are locked to your stake key in the Levvy smart contract
  • Assets remain secure in the smart contract until loan repayment
  • You maintain ownership until the loan is repaid or foreclosed

2. Instant Disbursement​

  • Loan amount is sent to your wallet immediately
  • No waiting periods or approval processes
  • Transparent on-chain transactions

3. Repayment Options​

  • On-time repayment: Pay back loan + interest to unlock your collateral
  • Extension: Negotiate new terms if you need more time
  • Default: Failure to repay allows lender to foreclose on collateral

Step-by-Step Borrowing Guide​

1

Connect Wallet

Visit levvy.fi and connect your preferred wallet

2

Choose Asset Type

Select either NFTs or Tokens

3

Click "Borrow"

Navigate to the borrowing interface

4

Select Collateral

Choose the NFT or Token you want to use as collateral

5

Review Offers

See available loan offers and their terms

6

Accept & Sign

Follow the steps, sign the transaction, and receive your ADA

Key Information​

📊 Average LTV Calculation​

When borrowing, the platform will show you:

  • Average LTV based on your total collateral
  • This varies because you may borrow from multiple lenders
  • Each lender may offer different rates

💰 Fees and Interest​

The module clearly displays:

  • Total fees for the loan
  • Interest amount to be repaid
  • Combined repayment amount
  • Due date for repayment

Interest Rate Optimization​

How We Determine Rates

Our team conducts thorough analysis of loan metrics to carefully balance supply and demand between lending and borrowing. This ensures optimal interest rates for each collection and token.

Important Features​

✅ Loan Extensions​

  • Available to all borrowers
  • Negotiate new terms if unable to repay on time
  • Prevents immediate foreclosure
  • Allows flexibility in repayment

⚠️ Risk Management​

  • Only borrow what you can repay
  • Consider market volatility
  • Plan for interest payments
  • Have a repayment strategy

Best Practices​

🎯 Know Your LTV

Understand the loan-to-value ratio and leave buffer for market movements

📅 Track Due Dates

Set reminders for loan repayment to avoid foreclosure

💡 Compare Offers

Review multiple lender offers to get the best terms

🔄 Plan Exit Strategy

Have a clear plan for loan repayment before borrowing

Common Use Cases​

  • 🚀 Quick Liquidity: Access ADA for opportunities without selling assets
  • 💰 Arbitrage: Leverage assets for profitable trades
  • 🛡️ Emergency Funds: Cover unexpected expenses
  • 📈 Investment Capital: Participate in token sales or farming
Pro Tip

Always borrow less than the maximum available to leave room for market fluctuations and ensure you can comfortably repay the loan.

Next: Lending

Learn how to become a lender and earn yield on your ADA.