Borrow Assets

How to borrow stablecoins against your deposited prediction market collateral — limits, mechanics, and best practices.

How Borrowing Works

After depositing collateral, call borrow(amount) on VarlaCore. The contract checks that your post-borrow health factor stays above 1.0, then transfers stablecoins from the VarlaPool to your wallet.

newDebt = currentDebt + borrowAmount
healthFactor = weightedCollateral / newDebt

if healthFactor >= 1.0:
  ✓ Transfer stablecoins to borrower
else:
  ✗ Revert — would make position unhealthy

Maximum Borrow Amount

Your max borrow is determined by the weighted collateral value minus your current debt. Each position contributes based on its oracle price and risk tier LTV.

maxBorrow = Σ(positionValue × tierLTV) - currentDebt

Example:
├── Position A: $5,000 × 80% = $4,000
├── Position B: $3,000 × 65% = $1,950
├── Current debt: $2,000
└── Max additional borrow: $3,950

Borrowing to your maximum leaves zero margin. Any price drop in your collateral will trigger liquidation. A safe buffer is borrowing no more than 70-80% of your max capacity.

Interest

Interest begins accruing immediately on a per-second basis. Your debt grows continuously via the global borrow index. See Interest Rates for the full rate model.

Requirements

Requirement	Details
Collateral deposited	At least one eligible PM position
Oracle fresh	Price data must not be stale (<15min)
Post-borrow HF ≥ 1.0	Health factor must remain healthy
Pool liquidity	Pool must have enough available stablecoins