Why Borrow on Stormbit ?
Stormbit isn’t your typical DeFi lending protocol. It offers high LTV loans, no liquidations, and full transparency. Borrowers can unlock capital without selling their assets and use it strategically, whether to hedge, farm, or earn, all while staying in control.
1. Access Liquidity Without Selling
Need stablecoins or ETH but want to keep exposure to your tokens?
Borrow at high LTV (60–90%) against your assets
If your tokens increase in value during the loan term, repay and keep the upside
If not, your loss is capped to the collateral, with no risk of surprise liquidations
Ideal for long-term holders, founders, and ecosystem participants
Example: You hold 1,000 XYZ tokens at $2 = $2,000 Borrow $1,600 USDC at 80% LTV If XYZ pumps to $3, repay the loan and reclaim $3,000 worth of tokens.
2. Hedge Against Market Downturns
Worried your token might drop in value?
Borrow against your volatile assets and protect your downside
If the token price crashes, default and walk away with more than you'd have from just holding
Example: You hold 1,000 XYZ tokens at $2 = $2,000 Borrow $1,400 USDC at 70% LTV If XYZ drops to $1, you default and keep $1,400 That’s $400 more than holding $1,000 worth of devalued tokens
3. Farm With Borrowed Capital
Put idle capital to work without selling your long-term holdings.
Example: You lock $5,000 in ETH as collateral Borrow $3,500 USDC at 70% LTV Deposit USDC into a farm earning 15% APY After 90 days, you earn ~$130 Repay the loan + interest and keep the yield
You retain your ETH exposure and boost capital efficiency with minimal risk.
4. Market Neutral Yield Play with L2 Tokens
Capture protocol yield in sideways markets—no exposure required.
Token: STRK (Starknet native token)
Strategy:
Deposit $1,500 USDC as a lender, set APY (e.g., 60%)
Borrow $1,000 worth of STRK using USDC as collateral
Lend the STRK back into the protocol at 40% APY
Earn on both sides of the loop
Result: Fully hedged, no liquidation risk, no reliance on token price movements. You profit purely from the spread between yields.
WHY REPAY FOR A BORROWER
Rehypothecation of Collateral
A borrower locks collateral in a lending term but continues to earn passive yield on it through rehypothecation, creating a strong incentive to repay rather than abandon the loan.
Example Scenario
Borrower deposits 10 ETH as collateral for a loan.
They borrow $10,000 USDC at an 80% LTV.
The locked ETH is automatically deposited into a yield-generating strategy (e.g., stETH staking, LRTs, or DeFi lending pools).
Over a 90-day loan term, the collateral earns 5% APY, generating ~0.125 ETH ($420 at $3,300/ETH) in yield.
Outcome:
If the borrower repays, they reclaim both their ETH and the accrued yield ($420 in ETH).
If they default, they lose not only their ETH but also the earned yield, making defaulting significantly less attractive.
By allowing yield on locked collateral, Stormbit creates a natural incentive to repay loans, ensuring that borrowers have economic motivation to avoid defaulting.
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