Taking out a Line of Credit
Borrowing is capped at 50% of the value of the collateral deposited. The line of credit is denominated in the same unit of account as the base token, issued as svTokens. It is important to keep in mind that the minimum collateralization ratio may be subject to change in the future.
The synthetic DeFi primitives called svTokens are issued as our line of credit. The “sv” denotes that the Savvy protocol mints them. Our synthetics are interchangeable representations of a claim on the deposited collateral, treated as tokenization of the depositor's debt in the same unit of account. The svTokens are paired with correlated tokens in liquidity pools without impermanent loss. For instance, svUSD are synthetic tokens created when users deposit USDC, USDT, and DAI into Savvy protocol. The svTokens play a critical role in the Savvy protocol making it possible to eliminate liquidation.
Zero. The earned yield is harvested and auto-compounded for the same base token, and attributed to the user's outstanding debt balance (auto-repaying loans!).