FAQs
Why am I not able to repay my debt?
Failure to repay your debt can occur for two main reasons:
You don’t have enough of the borrowed asset in your wallet to cover the outstanding debt
Partial repayments may leave you with a borrowing balance of less than $10, which is not allowed on Swaylend. To fully close your borrowing position, ensure that you repay the exact amount borrowed.
What is Borrow APY?
Borrow APY is the interest rate borrowers pay over a year for taking out loans. It reflects the cost of borrowing assets on the platform, typically fluctuating based on the demand and supply of the asset. Borrowers are charged this APY, which is calculated and compounded periodically.
What is Supply APY?
Supply APY is the interest rate earned by users who deposit assets into the protocol as liquidity. It reflects the yield suppliers receive over a year, from borrowers who pay interest on their loans. The APY fluctuates based on demand for the asset, and the interest is compounded periodically.
What is Reward API?
Reward APY represents the estimated annualized return to eligible users for the reward can expect to earn on their participation in the incentivized program.
What is Net Earn APY
Net Earn APY represents the total of Earn APY and Reward APY, calculated as follows: Net APY = Earn APY + Reward APY.
What is Net Borrow APY
Net Borrow APY represents the total of Borrow APY and Reward APY, calculated as follows: Net APY = Borrow APY + Reward APY. Please note: Rewards are applicable only when the collateral asset for the Borrow position is ETH, USDT, or FUEL.
How is Collateral handled?
Collateral is required for borrowing and is subject to liquidation if a position’s liquidation ratio is exceeded.
Can I open a borrow or earn position simultaneously on a single market?
No, you can not. Swaylend implemented single-asset borrowing model, which means that users can only maintain one active position per market, either as a borrower or a lender. That means that you can either supply the assets to Earn or Borrow assets on a single market. This design enhances protocol security, minimizes risk, and reduces the likelihood of liquidations, ensuring a more stable and reliable lending experience.
What are the main risks associated with being a Lender?
Swaylend has taken all necessary measures to minimize risks for borrowers, though some risks are inherent to the system:
If the value of the collateral drops below a certain threshold, it may be liquidated to repay the loan, leading to a loss of assets
Borrowing costs can increase if the protocol’s interest rates rise, making the loan more expensive to maintain
Vulnerabilities in the protocol’s code could lead to loss of collateral or funds
Sudden price drops in the collateral or price increases in borrowed assets can negatively impact the borrower’s position
Why does Swaylend have supply caps on collateral assets?
Caps limit exposure to certain assets, preventing excessive borrowing against volatile or low-liquidity tokens. This helps ensure the protocol remains solvent, even during large price swings or market manipulation. As the Fuel ecosystem matures and liquidity grows, we will gradually increase the supply cap.
Why can not I borrow up to 100% of the collateral value?
Users can’t borrow against 100% of their collateral in lending protocols to manage risk and ensure the protocol remains solvent.
A typical limit, such as 80%, is set to provide a buffer in case the value of the collateral decreases. This helps prevent liquidation when market prices fluctuate and ensures enough collateral to cover the borrowed amount, protecting the borrower and the protocol from insolvency risks.
Fuel Points - Ended at 15.1.2025
Last updated