Welcome to the How to Borrow on the Parcl Protocol guide. The Parcl Protocol Borrow feature allows you to borrow Parcls using USDC as a collateral asset.
This guide will cover why a user would consider Borrowing on the Parcl Protocol and show you exactly how to get started with the Borrow feature.
Want to watch a video instead? Don’t miss the How to Borrow on Parcl video tutorial embedded below.
Why Borrow on Parcl?
The Parcl Protocol Borrow feature was designed to be incredibly intuitive, and simple to use, for experienced crypto traders and beginners alike. The Parcl Protocol makes it easy to borrow against your USDC collateral: Simply deposit your desired amount of USDC, and choose the amount of Parcl tokens you wish to borrow by creating a vault position.
Intuitive Health Ratio Scale
You can quickly see the overall ‘health’ of your loan, also called a vault position, and easily manage your vault position to meet your risk profile.
Easily manage your position
The Manage Vault Positions page is designed so you can easily manage your existing vault position. Whether you want to borrow more tokens, deposit more collateral, or withdraw collateral when paying down your Parcl token debt it’s as easy as just a few clicks.
Before you can use the Borrow feature, you’ll first need a Solana wallet–we recommend Phantom. If you need help getting started, be sure to check out “How To Set Up Phantom” as well as our advice on the top 5 Solana crypto wallets.
You’ll also need your desired amount of USDC to be used as collateral.
How To Borrow On Parcl
The Parcl Protocol Borrow feature allows you to borrow Parcls based on your deposited USDC collateral. If you have USDC and would like to get exposure to the real estate markets using Parcl, the Borrow feature is for you.
Here is the Borrow page.
At the top, you’ll see your current vault positions. Below you’ll see the many types of Borrow options available.
Here’s an example of opening a position for USDC | San Francisco position
Clicking “Open Position” will bring you to the Borrow module
1. Deposit your USDC
Select the amount of USDC you would like to use as collateral. Your available USDC is based on the amount of USDC you hold in your Solana wallet. In this example, there is $500 USDC being used as collateral.
2. Set your Health Ratio
Using the slider, choose your desired Health Ratio for the specific position.
The Health Ratio is the minimum USD ratio of collateral to Parcl token debt allowed for a specific vault configuration.
If your vault position's health falls below the minimum collateral ratio, then you enter a buffer zone where you can deposit more collateral or repay debt because those actions make your vault position more healthy, but you can no longer borrow or withdraw because those actions make your vault position less healthy.
If your health ratio falls below the liquidation ratio, which is even lower than the minimum collateral ratio, then you will be partially liquidated to bring your vault position back to a healthy ratio.
Sliding to the right will lessen the risk of your position.
As always, please discuss any positions with your financial advisor, and do not invest more than you can afford to lose.
The Borrow feature is encouraged to be used by experienced traders only*
3. Confirm your Borrow amount
Once you’re happy with the amount of USDC you would like to use as collateral as well as your Health Ratio, click “Borrow” and our transaction.
Upon approving your transaction, you will now see your Open Position under the “My Vault Positions” on the Borrow page. At a glance you can see your Health Ratio, amount of deposited USDC, and how much you’ve borrowed.
Clicking an individual vault card will bring you a more detailed look at your position.
At the top you can see the current price per SqFT
You can also see your position’s Health Scale here:
And on the right, you can manage your collateral or manage your debt at any time.
You can always deposit more collateral (USDC) but you can only borrow and withdraw the max amount that would keep your health ration above or equal to the minimum collateral ratio. You can only repay up to the max Parcl token debt you owe with the specific vault position.
Congratulations, you used the Parcl Protocol Borrow feature successfully!
If you’re looking to Trade or Pool on the Parcl Protocol, be sure to check out the additional guides here: