💰For Borrowers

Welcome to the DreamLend Borrower Guide! As a borrower, you can access capital by providing collateral, enabling you to leverage your crypto assets without selling them.

🎯 What is Borrowing on DreamLend?

Borrowing on DreamLend allows you to:

  • Access Liquidity: Get cash without selling your crypto

  • Leverage Positions: Use borrowed funds for trading or investments

  • Earn Rewards: Receive $DREAM tokens for healthy loan management

  • Flexible Repayment: Make partial payments and manage collateral dynamically

💡 Why Borrow Instead of Sell?

Maintain Crypto Exposure 📈

  • Keep your long-term crypto positions

  • Benefit from potential price appreciation

  • Avoid taxable events from selling

Access Working Capital 💼

  • Fund business operations

  • Cover unexpected expenses

  • Take advantage of investment opportunities

Leverage Trading 📊

  • Increase position sizes

  • Implement advanced trading strategies

  • Amplify potential returns

🚀 Getting Started as a Borrower

Step 1: Prepare Your Collateral 💎

  1. Choose Collateral: Select tokens you want to use as collateral

  2. Check Balances: Ensure sufficient collateral tokens

  3. Understand Ratios: Learn about collateral requirements

Step 2: Find the Right Loan 🔍

  1. Browse Offers: Visit the "Offers" page

  2. Compare Terms: Analyze rates, durations, and requirements

  3. Check Collateral: Ensure you can meet collateral requirements

Step 3: Accept and Manage 🤝

  1. Accept Loan: Approve collateral and accept offer

  2. Monitor Health: Keep track of loan health factor

  3. Manage Actively: Add collateral or make payments as needed

🔍 Finding the Perfect Loan

Evaluating Loan Offers 📊

Interest Rates 💰

  • Compare APR: Look for competitive annual rates

  • Calculate Total Cost: Factor in loan duration

  • Consider Market Rates: Understand if rates are fair

Collateral Requirements 🛡️

  • Ratio Needed: Check required collateral percentage

  • Liquidation Threshold: Understand liquidation risk

  • Token Compatibility: Ensure you have required collateral

Loan Terms ⏰

  • Duration: Match with your repayment timeline

  • Flexibility: Look for partial repayment options

  • Lender Reputation: Consider lender's history

Smart Loan Selection 🧠

Match Your Needs

Use Case Examples:
- Short-term liquidity: 7-30 day loans
- Trading capital: 30-90 day loans
- Long-term leverage: 90+ day loans
- Emergency funds: Flexible terms preferred

Risk Assessment

  • Conservative: 150%+ collateral ratio

  • Moderate: 130-150% collateral ratio

  • Aggressive: 120-130% collateral ratio

🏥 Loan Health Management

Understanding Health Factors 📊

Health Factor Calculation

Health Factor = (Collateral Value / Loan Value) × 100%

Example:
- Loan: 1000 USDT ($1,000)
- Collateral: 0.5 WBTC ($30,000)
- Health Factor: (30,000 / 1,000) × 100% = 3000%

Health Status Levels

  • 🟢 Healthy: >150% (Safe zone)

  • 🟡 At Risk: 120-150% (Monitor closely)

  • 🔴 Liquidatable: <120% (Immediate action needed)

Maintaining Healthy Loans 💪

Regular Monitoring 👀

  • Daily Checks: Monitor health factor daily

  • Price Alerts: Set up notifications for price changes

  • Market Awareness: Stay informed about market conditions

Proactive Management 🎯

  • Add Collateral: Boost health factor when needed

  • Partial Repayments: Reduce loan principal

  • Rebalancing: Optimize collateral composition

Managing Collateral 🔧

Adding Collateral

  1. Navigate to Loan: Go to "My Loans" and select your loan

  2. Add Collateral: Use the collateral management interface

  3. Approve Tokens: Confirm token approval transaction

  4. Execute Addition: Complete the add collateral transaction

Removing Collateral

  1. Check Health: Ensure removal won't trigger liquidation

  2. Calculate Impact: Verify new health factor

  3. Execute Removal: Complete the removal transaction

  4. Monitor Result: Confirm new health status

💳 Repayment Strategies

Full Repayment 💯

  • Best For: When you have full repayment amount

  • Benefits: Complete loan closure, all collateral released

  • Process: Navigate to loan → Click "Repay Full Loan"

Partial Repayments 📊

  • Best For: Managing interest costs and health

  • Benefits: Reduce principal, improve health factor

  • Strategy: Regular small payments vs. large payments

Optimal Partial Payment Strategy

Smart Repayment Schedule:
Week 1-2: Monitor health, no payments needed
Week 3-4: Small payments if health declining
Week 5-6: Larger payments to maintain buffer
Final Week: Full repayment or refinance

Interest Management 💰

  • Accrual: Interest compounds over time

  • Payment Timing: Earlier payments save more interest

  • Calculation: Use loan details to track total owed

🎁 Earning $DREAM Rewards

Reward Mechanics 🏆

  • Healthy Loan Bonus: Extra rewards for maintaining good health

  • Long-term Rewards: Bonus for longer loan durations

  • Active Management: Rewards for collateral optimization

Maximizing Rewards 📈

  1. Maintain Health: Keep loans well-collateralized

  2. Longer Terms: Choose longer durations when possible

  3. Active Management: Regularly optimize collateral

  4. Multiple Loans: Diversify across different loans

Claiming Rewards 🎯

  1. Check Balance: View accumulated $DREAM in rewards page

  2. Claim Tokens: Execute claim transaction

  3. Reinvest: Use rewards for more collateral or trading

⚠️ Risk Management for Borrowers

Understanding Risks 🚨

Liquidation Risk

  • Cause: Collateral value drops below threshold

  • Consequence: Lose collateral, loan closed

  • Prevention: Maintain healthy ratios, monitor prices

Interest Rate Risk

  • Fixed Rates: Rate locked for loan duration

  • Market Changes: Rates may become uncompetitive

  • Mitigation: Choose appropriate loan terms

Market Risk

  • Collateral Volatility: Price swings affect health

  • Correlation Risk: Borrowed and collateral assets moving together

  • Timing Risk: Market conditions changing during loan

Risk Mitigation Strategies 🛡️

Conservative Collateralization

Recommended Buffers:
- Stable Collateral (USDC): 150-200%
- Major Crypto (BTC/ETH): 200-250%
- Altcoins: 250-300%
- New Tokens: 300%+

Diversification

  • Multiple Loans: Spread risk across different loans

  • Collateral Types: Use different collateral assets

  • Loan Sizes: Vary loan amounts and terms

Active Monitoring

  • Daily Health Checks: Monitor health factors

  • Price Alerts: Set up notifications

  • Market Analysis: Stay informed about trends

🔧 Advanced Borrowing Strategies

Leverage Trading 📊

Example Leverage Strategy:
1. Deposit 1 BTC as collateral
2. Borrow 20,000 USDT (assuming BTC = $50,000)
3. Buy additional crypto with borrowed USDT
4. Manage health factor actively
5. Repay loan when profitable

Yield Farming 🌾

  • Borrow Stablecoins: Use for yield farming

  • Earn Farming Rewards: Generate income from borrowed funds

  • Cover Interest: Ensure farming yields exceed loan costs

  • Risk Management: Monitor both loan and farming risks

Arbitrage Opportunities ⚖️

  • Cross-Exchange: Exploit price differences

  • Temporal Arbitrage: Benefit from timing differences

  • Risk-Free Profits: When executed properly

Cash Flow Management 💰

  • Business Operations: Fund business needs

  • Emergency Liquidity: Access funds quickly

  • Investment Opportunities: Capitalize on time-sensitive deals

🆘 Emergency Situations

Approaching Liquidation 🚨

Warning Signs:

  • Health factor below 130%

  • Rapid collateral price decline

  • Unable to add more collateral

Immediate Actions:

  1. Add Collateral: If possible, boost health factor

  2. Partial Repayment: Reduce loan principal

  3. Contact Support: Get help from community

  4. Prepare for Liquidation: Understand consequences

Market Crash Scenarios 📉

Preparation:

  • Maintain higher collateral ratios

  • Keep emergency collateral reserves

  • Set up automated alerts

  • Have repayment funds ready

During Crisis:

  • Act quickly to add collateral

  • Consider partial repayments

  • Monitor multiple loans simultaneously

  • Stay calm and follow your plan

Technical Issues 🔧

Common Problems:

  • Transaction failures

  • Interface not loading

  • Wallet connection issues

Solutions:

  • Try different browsers/wallets

  • Check network status

  • Contact support channels

  • Use backup interfaces

📊 Loan Performance Tracking

Key Metrics 📈

  • Current Health Factor: Real-time loan safety

  • Interest Accrued: Total interest owed

  • Days Remaining: Time until maturity

  • Collateral Value: Current USD value

  • Total Cost: Interest + fees

Performance Analysis 🔍

  • Cost of Capital: Effective interest rate paid

  • Opportunity Cost: What else could you have done

  • Risk-Adjusted Returns: Factor in liquidation risk

  • Learning: Improve future borrowing decisions

📚 Best Practices Summary

✅ Do's

  • Maintain healthy collateral ratios (150%+)

  • Monitor daily health factors

  • Plan repayment strategy in advance

  • Claim $DREAM rewards regularly

  • Stay informed about market conditions

  • Keep emergency collateral reserves

❌ Don'ts

  • Over-leverage your positions

  • Ignore health factor warnings

  • Borrow more than you can repay

  • Use borrowed funds for high-risk speculation

  • Forget about interest accrual

  • Panic during market volatility

🔗 Additional Resources

Ready to access liquidity with your crypto? Find your perfect loan today! 🚀

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