Borrow

Access term loans priced at origination with oracle-immune protection.

In this guide: Overview · How Borrowing Works · Protection · Costs · Collateral · Loan Lifecycle

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Overview

Borrowing on Stormbit gives you term certainty through an upfront premium. Once your loan is funded, LTV is not monitored until maturity — regardless of what happens to collateral prices during the term.

You purchase this protection by paying a premium that compensates lenders for absorbing volatility risk on your behalf.

How Borrowing Works

See How It Works for the general loan flow. As a borrower:

1. Lock collateral — Deposit assets into the loan module (ERC20, NFT, or credential)

2. Create loan request — Specify amount, duration, and collateral

3. Get funded — Lenders allocate to your loan (manual or automated)

4. Use funds freely — Your collateral is locked but cannot be liquidated during the term

5. Repay at maturity — Return principal + interest to get collateral back

Your key benefit: Term certainty. Once funded, you're protected from liquidation until maturity, regardless of price movements.

Protection During Your Loan

Stormbit loans are oracle-immune—LTV is checked only at origination, never during the term. Once funded, you cannot be liquidated until maturity, regardless of price movements.

Example: ETH drops 30% on day 5? Flash crash? You're protected until maturity on day 30.

Trade-off: You pay a higher upfront premium for this pre-priced time window. Lenders bear the price risk (delta exposure), and the premium compensates them for it.

Liquidation only happens if you don't repay by maturity. At that point, your collateral enters a Dutch auction.

Understanding Your Costs

Interest Calculation

Your interest is locked at origination:

$$I = P \cdot r \cdot \frac{T}{365}$$

Variable	Description
I	Interest amount
P	Principal (borrow amount)
r	APR (annual percentage rate)
T	Duration (days)

APR is determined by:

• LTV: Higher LTV = higher APR

• Duration: Longer term = higher APR

• Volatility: More volatile collateral = higher APR

Example Cost Comparison

Borrowing 50,000 USDC against ETH:

Duration	LTV	Approx. APR	Interest Cost
7 days	75%	~25%	~240 USDC
30 days	80%	~35%	~1,438 USDC
90 days	70%	~30%	~3,698 USDC

When Stormbit Makes Sense

Use Stormbit when:

• You need term certainty (oracle-immune during loan)

• You expect volatility (flash crashes, news events)

• You have a defined use case with clear timeline

• The premium is worth the protection (similar to buying insurance)

Consider alternatives when:

• You can actively monitor and manage liquidation risk

• Variable rates are low and you need maximum capital efficiency

• You're borrowing for indefinite periods without clear end date

Collateral Requirements

ERC20 Collateral

Standard crypto-backed loans:

$$C_{req} = \frac{B}{LTV_{max}}$$

Variable	Description
Creq	Required collateral value
B	Borrow amount
LTVmax	Maximum loan-to-value ratio

Example: 50,000 / 0.85 = 58,824 USDC collateral needed

NFT Collateral

P2P loans using NFTs:

• Lender evaluates NFT value manually

• No automated LTV calculation

• Negotiated terms between parties

• Higher rates due to illiquidity risk

Identity/Credential Collateral

Using zkTLS attestations:

• Prove income, employment, or identity

• Lower collateral requirements possible

• Credential-gated access to lending

• Privacy-preserving verification

Loan Lifecycle

Creating a Loan

1. Approve collateral token for module contract

2. Call loanInitialize with:

   • Borrow amount

   • Duration

   • Interest amount

   • Module data (collateral info)

3. Collateral transferred to module

Getting Funded

• Loan status: PENDING

• Allocation deadline: typically 7 days

• Lenders can allocate funds

• Once fully funded: status becomes EXECUTED

• Receive borrowed tokens

During the Loan

• Maturity = allocation time + duration

• No monitoring required

• Cannot add or remove collateral

• Cannot extend loan

At Maturity

Option 1: Repay

1. Approve repayment amount

2. Call repay with full principal + interest

3. Receive collateral back

4. Loan status: REPAID

Option 2: Default

1. Don't repay by maturity

2. Loan enters Dutch auction

3. Liquidator buys collateral at discount

4. You lose collateral

5. Loan status: LIQUIDATED

Rolling Over

To continue borrowing:

1. Repay existing loan

2. Create new loan request

3. Get funded again

Or use flash loan:

1. Flash borrow repayment amount

2. Repay old loan

3. Create new loan

4. Get funded

5. Repay flash loan

Managing Risk

Choose LTV Carefully

LTV	Risk Level	Use Case
<70%	Low	Conservative, long duration
70-85%	Medium	Standard borrowing
85-95%	High	Short duration, correlated assets
>95%	Very High	Only for stETH/ETH type pairs

Match Duration to Need

• Short (7-14 days): Trading, arbitrage

• Medium (30 days): Working capital

• Long (60-90 days): Project funding, strategic positions

Plan for Repayment

Before borrowing, ensure you have:

• Repayment source identified

• Buffer for interest costs

• Emergency repayment plan

Summary

Aspect	Details
Minimum loan	Protocol-configured per asset
Durations	7-90 days typically
LTV range	50-95% depending on collateral
Liquidation risk	Risk transferred to lenders during term
Cost	Higher APR than variable protocols
Best for	Users valuing certainty over cost