# FAQs

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<summary>What is the maximum amount I can borrow?</summary>

The minimal amount you can borrow must be above $10

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<summary>Why am I not able to repay my debt?</summary>

Failure to repay your debt can occur for two main reasons:

1. You don’t have enough of the borrowed asset in your wallet to cover the outstanding debt
2. 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.

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<summary>What is Borrow APY?</summary>

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.

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<summary>What is Supply APY?</summary>

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.

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<summary>What is Reward API?</summary>

Reward APY represents the estimated annualized return to eligible users for the reward can expect to earn on their participation in the incentivized program.

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<summary>What  is Net Earn APY</summary>

Net Earn APY represents the total of Earn APY and Reward APY, calculated as follows: Net APY = Earn APY + Reward APY.

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<summary>What  is Net Borrow APY</summary>

Net Borrow APY represents the total of Borrow APY and Reward APY, calculated as follows: Net APY = Borrow APY + Reward APY.\
&#xNAN;_&#x50;lease note: Rewards are applicable only when the collateral asset for the Borrow position is ETH, USDT, or FUEL._

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<summary>Is there APY for supply collateral?</summary>

Users do not earn interest on the collateral they supply.

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<summary>How is Collateral handled?</summary>

Collateral is required for borrowing and is subject to liquidation if a position’s liquidation ratio is exceeded.

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<summary>What are the main risks associated with being a Lender?</summary>

Swaylend has taken all necessary measures to minimize risks for lenders, though some risks are inherent to the system:

* **Vulnerabilities in the protocol’s code** could be exploited, leading to loss of funds
* If there **isn’t enough liquidity when a lender wants to withdraw**, they may face delays or be unable to withdraw their assets
* If borrowers’ collateral drops significantly in value, it **may not fully cover their debt**, potentially resulting in losses for lenders
* **Fluctuating interest rates** can impact the return on supplied assets
* **Changes in asset prices** can affect both collateral value and liquidity within the protocol

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<summary>What are the main risks associated with being a Lender?</summary>

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

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<summary>Why does Swaylend have supply caps on collateral assets?</summary>

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.

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<summary>Why can not  I borrow up to 100% of the collateral value?</summary>

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.

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## Fuel Points - Ended at 15.1.2025

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<summary>I have questions about my Fuel Points balance.</summary>

For support with Fuel Points, please reach out to the [Fuel Discord community](https://discord.com/invite/xfpK4Pe), as Swaylend has no ownership or control over the Fuel Points Program. They can provide accurate information and answer any Fuel Points management and tracking questions.

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