Supplying and Borrowing Assets
How do users supply and borrow assets on the Crunch Network?
Users can supply and borrow assets on the Crunch Network by interacting with the lending contract.
- 1.A user deposits their cryptocurrency assets into the Lending contract by calling the deposit function and specifying the amount and type of asset they want to supply.
- 2.The Lending contract mints cTokens in return, which represent the user's share of the pool.
- 3.The user can then hold onto their cTokens or trade them on exchanges.
- 4.When a user wants to withdraw their assets, they simply call the withdraw function and specify the amount of cTokens they want to redeem.
- 1.A user supplies their cryptocurrency assets as collateral by calling the supply function and specifying the amount and type of asset they want to use as collateral.
- 2.The lending contract calculates how much they are allowed to borrow based on factors such as interest rates, loan-to-value ratios, and collateral balances.
- 3.The user can then call the borrow function and specify how much they want to borrow.
- 4.The borrowed funds are transferred to their wallet, and they are required to pay back the borrowed amount plus interest within a specified time frame.
- 5.If a borrower fails to repay their loan or if their collateral value falls below a certain threshold (known as the liquidation ratio), their position is automatically liquidated by the protocol.
Supplying and borrowing assets on Crunch Network is a straightforward process that is managed by smart contracts on a decentralized platform. This provides users with transparency, security, and flexibility in managing their cryptocurrency holdings.