Borrow

How Does Borrowing Work?

WeissFi enables users to borrow the WEIS stablecoin against their SUI holdings with user-defined interest rates. Unlike traditional DeFi lending platforms, WeissFi gives borrowers full control over the interest they pay, making it a flexible and capital-efficient borrowing solution.

Unlike traditional lending platforms, WeissFi lets you:

  • Instant Liquidity – Borrow WEIS immediately against your SUI holdings while maintaining exposure to the asset.

  • Choose your interest rate – You decide the interest rate for your loan, allowing for optimal financial planning.

  • Efficient Liquidations – WeissFi utilizes Stability Pools to absorb liquidated debt, protecting borrowers from sudden liquidations.

  • No Fixed Repayment Schedule – Repay your loan at any time, as long as you maintain a healthy Loan-To-Value (LTV) ratio.

  • No Counterparty Risk – WeissFi is a fully decentralized protocol running on the Sui blockchain.

  • Avoid Unpredictable Interest Hikes – Unlike traditional lending platforms where interest rates fluctuate based on external governance or algorithmic adjustments, WeissFi allows borrowers to set their own interest rate.

How to Borrow (Step-by-Step)

Step 1: Enter The Collateral Amount

  • Enter the amount of SUI you want to use as collateral.

  • Your collateral determines how much WEIS you can borrow.

Step 2: Choose Loan Amount

  • Enter the amount of WEIS you wish to borrow.

  • Keep an eye on the LTV (Loan-to-Value Ratio) and Liquidation Price to avoid risks.

LTV measures how much you borrow relative to your collateral. A higher LTV means higher risk.

Liquidation Price is the SUI price at which your loan will be liquidated if your collateral becomes insufficient.

Step 3: Select Your Interest Rate

  • Set the interest rate you’re willing to pay.

  • Lower rates reduce your borrowing cost but increase redemption risk.

Redemption Risk: If the WEIS peg falls below $1, users can redeem WEIS for your collateral at a 5% discount.

Step 4: Review & Sign

  • Check the loan summary: ✓ Collateral ✓ Loan amount ✓ Interest rate ✓ Total Debt (Loan Value + (0.75% Borrowing Fees) + (7-Day Interest rate))

  • Click Confirm & Sign to finalize your loan.

  • You receive WEIS directly in your wallet and can use it immediately.

Glossary

Loan-to-Value (LTV) Ratio

Definition: The ratio between the amount of WEIS borrowed and the deposited collateral (in USD).

LTV=(Borrowed WEIS (USD)Collateral Value (USD))×100LTV = \left( \frac{\text{Borrowed WEIS (USD)}}{\text{Collateral Value (USD)}} \right) \times 100

Example Calculation:

  • SUI Price: $3.9674

  • Collateral: 2,000 SUI

  • Collateral Value: 2,000 × 3.9674 = 7,934.80 USD

  • Borrowed Amount: 2,000 WEIS

LTV=(20007,934.80)×100=25.20LTV = \left( \frac{\text{2000}}{\text{7,934.80}} \right) \times 100 = 25.20 %

Higher LTV = Higher liquidation risk.

Liquidation Price

Definition: The Liquidation Price is the SUI price at which your collateral is no longer sufficient to cover your borrowed WEIS, triggering liquidation.

LiquidationPrice=Borrowed Amount×1.19Collateral DepositedLiquidation{\text{Price}} = \frac{\text{Borrowed Amount} \times 1.19}{\text{Collateral Deposited}}

Example Calculation:

  • SUI price​ = $3.9674

  • Collateral: 2,000 SUI

  • Borrowed Amount: 2,000 WEIS

  • Current LTV = 25.20%

  • Max LTV = 80%

LiquidationPrice=2000×1.192000=1.19Liquidation{\text{Price}} = \frac{\text{2000} \times 1.19}{\text{2000}} = 1.19

This means that if the price of SUI drops below $1.19, your position will be liquidated.

Redemption

  • If WEIS loses its $1 peg, holders can redeem WEIS for SUI using the redemption mechanism.

  • This process only affects borrowers with the lowest collateralization ratio, not specifically those with low interest rates.

  • The redeemer exchanges WEIS for SUI by reducing the debt of the least collateralized borrowers.

  • Borrowers lose some of their collateral, but their debt is reduced by an equivalent amount in WEIS.

  • Redemptions do not incur additional fees, but borrowers with low collateral ratios are at risk of being affected.

Lower rate → Cheaper loan but higher chance of redemption.

Higher rate → More expensive loan but lower chance of redemption.

To Summarize

  • Keep your LTV low to avoid liquidation.

  • Choose a balanced interest rate to minimize redemption risk.

  • Manage your loan via the dashboard anytime.

Start Borrowing today and take advantage of decentralized finance on Sui.

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