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Taking out a Line of Credit

How much can I borrow?

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.

What are svTokens?

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.

What is the Savvy Swap?

Savvy Swap is a non-instantaneous, guaranteed 1:1 exchange from svTokens to base tokens. Savvy users can use the Savvy swap for arbitrage if the price correlation between svTokens and base tokens weakens. Savvy swap is limited by flow rates per base token, which are subject to change. Current flow rates are:
Base
Amount ($)
USD
$1,250 / week
ETH
1.36 ETH / week
BTC
0.006 BTC / week

Why to use Savvy Swap?

A user can use the Savvy Swap tool to ensure their Savvy synthetic is swapped exactly for the base token. The swap occurs over time as yield comes into the ecosystem or as the treasury subsidizes the funds used to swap. With the Savvy swap the user trades speed of swap for price correlation.
A user might use Savvy Swap if
  • they've acquired Savvy synthetics at a discount (e.g. via externally swapping during a depeg)
  • they've acquired Savvy synthetics without having an outstanding debt (e.g. from market making)

How much will I pay in interest?

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!).