Level 3 · Using collateral to access liquidity

What is borrowing?

Borrowing means taking an asset from the pool and owing it back, with interest, while keeping collateral locked.

You can only borrow if you have enough collateral. Aave uses each asset's LTV (loan-to-value) to cap how much you can take.

Borrowed balances grow over time at the borrow APY.

You can repay whenever you choose. Ronnie never repays for you in this version.

Borrowing creates liquidation risk. That is the tradeoff for accessing liquidity without selling collateral.