A quick introduction into how to get funds and start your interest earning journey.
All borrowing facilitated by the Algofi protocol is fully collateralized (e.g. users must maintain funds in excess of their borrow). Supplying funds into the protocol provides users with collateral that they may borrow against. Moreover, users earn interest according to algorithmic rates determined by supply, demand, and the Interest Rate Model.
To supply funds, a user starts by clicking on any row in the markets table below.
Algofi protocol markets table
Clicking on the USDC row, for example, will create the pop-up shown below. This modal displays the user's USDC balance, borrow limit in dollars, the asset supply rate, and the expected rewards earned (if a rewards program is running). After entering an amount to supply a new borrow limit is shown that reflects the increase in the user's borrow limit.
Supply modal for the USDC market, the user is supplying $1mm of USDC and increasing their borrow limit by $400k.
The user enters the amount they would like to lend and clicks "Supply USDC" to initiate a transaction. Below, for a user using MyAlgo Wallet, the pop-up displays transactions are to be signed and sent to the blockchain.
Supply group transaction on MyAlgo
The user may click any transaction in the group to inspect the transaction fields.
Transaction fields for the asset transfer transaction.
Press continue and enter your password to send the signed transaction to the blockchain.
Note, Algofi issues a group transaction to keep all the markets in the protocol fully synchronized and up to date. In this example we can see the transfer of 1mm of USDC (ASA ID #43994922 in the TestNet above) in the final transaction of the group.
Wait while the transaction is confirmed on the blockchain.
Supply group transaction loading
Supply transaction is successful and displays URL to AlgoExplorer
After supplying to the protocol, a user will see their balances decrease by the amount supplied. The wallet pane can be accessed by clicking the wallet address near the top-left of the corner.
A user will also see new assets appear in their "Supplied" table, on the right hand side of the page.
User "Supplied" section after a USDC supply transaction.
Lastly, a user's Max Borrow will increase to reflect their growing collateral:
Max borrow increases after the USDC supply.
A user's Max Borrow increases by Supplied Value * Collateral Factor
For example if the USDC collateral factor is 50%, supplying $1,000,000 worth of USDC would enable a user to borrow $500,000 against it. To learn more, see what is a collateral factor?
Besides the effects on a user's balances, collateral, and maximum borrow amount, supplying assets to the protocol will grow the Total Supply of the relevant market. The pool of assets from which to borrow is now larger, driving the borrow and lending interest rates down (see calculating borrow interest rate).