❓FAQs
What is Swaylend?
Swaylend is a decentralized lending platform built on the Fuel Network. It allows users to supply or borrow base assets, earning or paying interest based on their position.
What is a Base Asset?
The platform is structured around base asset markets, allowing users to supply base asset and earn interest or borrow base asset and pay interest. For example, in the USDC market, USDC functions as the base asset that users can either borrow or supply.
Can I borrow and supply the same base asset?
Users can only maintain one active position per market, either as a borrower or a lender.
How is the borrow limit determined?
The borrowing limit is calculated based on the collateral you supply and its risk factor within the market.
Are there any fees for supplying or borrowing?
No, Swaylend does not charge fees directly for supplying or borrowing, but you will incur gas fees when interacting with the platform.
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.
How is Collateral handled?
Collateral is required for borrowing and is subject to liquidation if a position’s liquidation ratio is exceeded.
What are the main risks associated with being a Lender?
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
What are the main risks associated with being a Borrower?
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't I borrow up to 100% of 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
Do I earn Fuel Points by using Swaylend?
Yes, by using Swaylend, users automatically collect Fuel points. The allocation of points for your actions is entirely determined by Fuel’s guidelines. For more details on how points are earned, visit https://app.fuel.network/earn-points.
I have questions about earning Fuel Points or checking my Fuel Points balance
For support with Fuel Points, please reach out to the Fuel Discord community, 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.
Can’t find the answer you’re looking for? Join our Discord and open a support ticket—we’re here to help!
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