Borrow GARD
Last updated
Last updated
Supplying assets into smart-contract accounts connected to the protocol is the lifeblood of GARD. In order for GARD to come into existence, there must first be ample collateral behind it to ensure that it remains over-collateralized and that there is incentive for the community to keep the value of GARD pegged to 1 USD.
To supply ALGOs or gALGOs a user starts by going to the "borrow" page and entering how much of whichever asset the wish to deposit. Once a user has decided how much collateral they'd like to supply they will see how much GARD they'll be eligible to borrow and must borrow at least one GARD to begin as demonstrated below:
If you're interested in using your CDP to participate in governance click here to learn more about the different ways you can commit.
Once a user has borrowed GARD, they must ensure that the value of the GARD they must repay to the protocol does not exceed 115% the value of their collateral. Over time as a user accrues interest the amount of GARD they owe will increase while the value of their collateral may increase or decrease. As a result of this it's encouraged that users over-collateralize their assets adequately and monitor their vaults' health as displayed below:
As long as the value of the collateral in one's vault remains above 115% of the GARD minted a user doesn't need to worry about losing their collateral or being liquidated to protect the value of GARD and the protocol.
Once you have clicked "supply" you will be prompted to sign a number of transactions. Once complete, you now have a smart contract account enrolled in the GARD Protocol that you can use to leverage the assets you deposit in it to borrow GARD. If you have deposited ALGOs, you may also use these ALGOs to participate in Algorand's governance mechanism by checking here:
The amount of GARD a user may borrow is determined by the value of the assets that they've deposited into one of their vaults. The maximum amount they can borrow will be displayed here
In order for new GARD to be minted, a user must have at least 140% of the value of the GARD they'd like to mint present in their vault. This means that when minting GARD, a user can borrow 71.4% of the value of their assets deposited as collateral. A user must simply enter in how much GARD they'd like to borrow up to the maximum amount and then click as shown above.
Note: most users do not borrow the maximum amount of GARD possible. Users should pay particular attention to the and ensure that they never borrow GARD that puts them at a liquidation price higher than the lowest they believe that their collateral may fall to. For example, if a user's liquidation price is $.15 and they believe their collateral may fall to $.12 per unit, they should lower their liquidation price by borrow less GARD or supplying more collateral.
