Borrow

How do I borrow assets on Backpack Exchange?

1. Ensure you have sufficient collateral in your account.

2. Navigate to the Lend section and switch to the Borrow tab.

3. Choose the asset you want to borrow, enter the desired amount, and confirm the transaction.

How much can I borrow on the Backpack exchange?

1. Your borrowing capacity depends on your remaining available equity—the higher your available equity, the more you can borrow.

2. In most cases, you can borrow up to approximately 10 times your available equity in USDC, and up to around 5 times in USDT, SOL, BTC, or ETH.

3. No manual calculation is needed—you can easily view the maximum borrowable amount for your sub-account directly under the borrow button on the lending page.

Why can’t I borrow funds?

1. The initial margin ratio has reached 100%, which means you no longer have any available equity to use as collateral for borrowing.You can borrow funds once you've either added more margin or reduced your position size, bringing the initial margin ratio below 100%.

2. When the auto-borrow feature is enabled, borrowing can only occur through spot margin or withdrawals. If you wish to initiate a manual borrow,simply click the lightning icon next to the leverage multiplier to disable the auto-borrow feature. Once it’s turned off, you’ll be able to proceed with the manual loan.

3. Additionally, there is already an active lending position under this token. You must manually redeem the lent assets before you can proceed with borrowing this token.

What fees are associated with borrowing on the Backpack exchange?

1. Once a position is opened, an entry fee is immediately charged. This fee is equivalent to a portion of the hourly interest.

For example, if you collateralize 1 BTC and borrow 2,000 USDC at 12:50 AM, and the next interest calculation occurs at 1:00 AM, then the 10 minutes of accrued interest will be your opening fee.

1. An hourly interest charge is applied at every hour on the hour. The hourly interest = (Borrowed Amount × Annual Interest Rate) ÷ 365 days ÷ 24 hours.

How do I repay a borrow?

To repay your borrowed assets:

1. Go to the Lend section and switch to the Borrow tab.

2. Select the asset you wish to repay, enter the repayment amount, and confirm the transaction.

You can also enable Auto Lend, which will automatically use available balances to repay loans when possible.

Can I withdraw my collateral while I have an open borrow position?

Yes, you can withdraw a portion of your collateral, provided that doing so doesn’t lower your margin level below the required thresholds. If withdrawing collateral would put your account at risk of liquidation, the system will prevent the withdrawal.

Always check your margin level before attempting to withdraw.

Can I opt out of using specific assets as collateral?

On Backpack Exchange, your account operates on a cross-margin basis, meaning all eligible assets are used as collateral by default. There is no option to disable or opt out of using specific assets as collateral within the same account.

The only way to prevent an asset from being used as collateral is to move it to a sub-account, isolating it from your main account’s margin positions.

What happens if the value of my collateral drops while I have an open borrow position?

If the value of your collateral decreases significantly, your margin level will also drop. If it falls below the Maintenance Margin Fraction, your positions will be at risk of liquidation.

The system will automatically sell off your collateral to repay the borrowed funds and apply a liquidation penalty.

To prevent this, monitor your margin level and add more collateral if needed.

How does the liquidation process work for borrowed funds?

If your Account Margin Factor falls below the required Maintenance Margin Fraction, the liquidation engine will begin selling your collateral to cover the borrowed amount. All positions will be reduced in an orderly manner to protect both you and the platform.

A penalty fee will be applied, and the remaining collateral will be returned to your account.

Can I use borrowed funds for trading on Backpack Exchange?

Yes, you can use borrowed funds for both spot and margin trading. This feature provides extra capital to take advantage of market opportunities.

However, using leverage increases your risk, so it’s important to manage your collateral carefully and monitor your margin level to avoid liquidation.