LogoLogo
X👾💡🎒
Support Docs
  • Support Docs
  • Technical Docs
  • API Docs
Support Docs
  • Start Here
    • Downloads
  • Exchange
    • Account Functions
      • Change Email
      • Take Profit & Stop Loss Orders (TP/SL)
      • Export trading history (CSV)
      • Order types and executions
      • Generate API keys for Backpack Exchange
    • Identity Verification
      • KYC Identity Verification is pending
      • How To Verify Account Identity
        • Create a new account
        • Verify Identity (KYC)
      • Supported Regions
    • Deposits and Withdrawals
      • Crypto
        • How to Deposit
        • How to Withdraw
        • Deposit & Withdrawal Issues
        • Withdrawal Fees
      • Fiat
        • How to Deposit via Wire
        • How to Withdraw via Wire
        • FAQs
          • Deposit
          • Withdraw
        • Bank Guides
          • Chase
            • How to Deposit via Wire Transfer — Chase Bank
            • How to withdraw via wire — Chase
          • ZA Bank
            • How to Deposit via Wire Transfer — ZA Bank
            • How to Withdraw via Wire Transfer — ZA Bank
    • Login and Security
      • Account Identity Requirements
      • Reset Password
      • OTP Passcode
      • Reset 2FA
      • I suspect unauthorized access to my account
      • Troubleshoot connectivity issues
    • Product FAQs
      • Spot Trading FAQs
      • Lend/Borrow FAQs
        • Lend
        • Borrow
    • Programs
      • Points
      • Referrals
      • Affiliate Program
        • Flexible Commission Sharing
      • VIP
      • Market Maker Program
      • Token Listing Application
      • Bug Bounty Program
    • Trading Fees
    • API & Developer Docs
      • API Clients
      • Backpack Exchange Python API guide
      • Python WebSocket Guide for Backpack Exchange API
  • Wallet
    • What is Backpack Wallet?
    • Get Started
      • Supported Browsers and Platforms
      • Import/Recover Wallet
    • Actions
      • Swap Tokens
      • How to Buy and Sell Crypto with MoonPay
        • Buy Crypto in Backpack Wallet with MoonPay
        • Sell Crypto in Backpack Wallet with MoonPay
      • Refer, Swap & Earn
      • Stake SOL
      • SOL/ETH Bridge
      • Secure NFTs
      • Add Networks
      • Connect Hardware Wallet
      • Multisig
      • Custom RPC Addresses
      • Add Developer Testnets
      • Collaboration Application Form
    • Troubleshoot
      • Hide Spam NFTs
      • Hide Tokens
      • Wallet Not Loading
      • View Secret Recovery Phrases and Private Keys
    • Technical Docs
      • Deeplinks
        • Provider Methods
          • Connect
          • Disconnect
          • SignAndSendTransaction
          • SignAllTransactions
          • SignTransaction
          • SignMessage
        • Other Methods
          • Browse
        • Handling Sessions
        • Specifying Redirects
        • Encryption
        • Limitations
  • Report Issue or Bug
    • Exchange
    • Wallet
  • Legal
    • General Legal
      • User Agreement
      • Privacy Policy
      • Cookie Policy
    • VARA Disclosures
      • Virtual Asset Standards
      • VARA License Information
      • Risk Disclosures
      • Price Quotes
      • Exchange Trading Rules
      • Complaints
      • Available Digital Assets
    • UK Crypto Regulations & Risk Disclosure
    • Backpack Wallet
      • Terms and Conditions
      • Privacy Notice
Powered by GitBook

@ 2025 Backpack Exchange

On this page
  • How are interest rates calculated for lending and borrowing?
  • What arbitrage strategies can be used with lending and borrowing?
  • What are the risks associated with lending and borrowing on Backpack Exchange?
  • How do I view my lend and borrow activity?
  • How to differentiate between account balance, net equity, and available equity?
Export as PDF
  1. Exchange
  2. Product FAQs

Lend/Borrow FAQs

Backpack features an omnichain money market where users can lend and borrow a variety of assets.

PreviousSpot Trading FAQsNextLend

Last updated 3 days ago

Looking for in-depth walkthroughs? Check out our Backpack Guides and Tutorials at or our trading system docs at .


How are interest rates calculated for lending and borrowing?

  • Interest rates on Backpack Exchange are determined dynamically based on the utilization rate of the asset pool. Higher utilization rates lead to higher interest rates, making lending more profitable and borrowing more expensive.

  • The rates are displayed in real-time within the Lend & Borrow Info section, so you can stay informed of any changes.


What arbitrage strategies can be used with lending and borrowing?

  1. If you’re bullish on an asset, you can choose to collateralize that asset and borrow USDC. Then, use the borrowed USDC to purchase the asset on the spot market. Once the asset appreciates to your target price, you can sell it and repay the loan.

  2. If you’re bearish on an asset, and you still have available equity in your account, you can borrow the asset you expect to decline in value and immediately sell it. When the price drops to your target level, you can buy it back and repay the loan.

  3. As for stablecoin arbitrage: you can collateralize one type of stablecoin (e.g., USDC) to borrow another stablecoin with a lower interest rate (e.g., USDT), and then deposit the borrowed stablecoin into a protocol offering a higher lending yield—thereby profiting from the interest rate spread.


What are the risks associated with lending and borrowing on Backpack Exchange?

For Lenders

  • The main risk is that market conditions or utilization rates may change, potentially affecting the yield on your lent assets.

For Borrowers:

  • The value of your collateral could decrease, resulting in a lower margin level and the risk of liquidation. Additionally, fluctuating interest rates can impact the cost of borrowing. ‍

It’s crucial to understand these risks and manage your positions accordingly.


How do I view my lend and borrow activity?

You can view your lend and borrow activity in the Lend & Borrow Info section. Here, you’ll see details such as the total amount lent or borrowed, current interest rates, and accrued interest.

Use this dashboard to manage your lending and borrowing strategies effectively.


How to differentiate between account balance, net equity, and available equity?

  1. Account Balance It represents the real-time value of your account, taking into account any gains or losses from open positions.

  2. Net Equity

    • This refers to the risk adjusted dollarized value of all of the collateral in your account. Also known as your margin balance.

    • Net Equity = ∑ (Collateral Asset × Haircut Rate) + Unrealized PnL (profit and loss).

    Note:Different assets have different haircut rates, and these rates may fluctuate based on changes in the value of the collateral.You can click on the haircut value next to each asset to view detailed information.

  3. Available Equity (Remaining Equity) This is the portion of your net equity that is not being used as margin or collateral. It reflects how much equity is still available for borrowing or opening new positions.

Net Equity Available = Net Equity – Net Equity Locked

Didn't find what you needed here? Check out our in-depth Backpack Guides and Tutorials at or our trading system docs .

Learn.Backpack.Exchange
Learn.Backpack.Exchange
here
here