1. Who can borrow on Cake Defi?
Anyone with a KYC verified Cake DeFi account can start borrowing.
2. What crypto can I borrow?
You can borrow DUSD, the stablecoin of the DeFiChain ecosystem.
3. Do I need to have any collateral to borrow?
Yes. Furthermore, your loan has to be overcollateralized, meaning your collateral always has to be at least double as much as what you borrowed.
4. What crypto can I use as collateral to borrow?
You can use BTC, ETH, DFI, USDT or USDC as collateral. The collateral can be a combination of these cryptocurrencies as long as the DFI accounts for 50% of the collateral value.
5. How long are the loan terms?
You can keep the loan open as long as you want. Make sure that the loan is overcollateralized. If you want to close your loan, then you have to pay back the amount you borrowed plus the accumulated interest over this period.
6. What are the fees?
There are two types of fees: interest rate and origination fee. The interest rate is set to 5% APR and the origination fee is 0.5% (for every borrow) and is automatically deducted from the DUSD borrowed.
7. How is the loan interest calculated?
The loan interest is calculated from your total loan amount. This amount has to be paid back when you close your loan. The interest is calculated on a daily basis and added to the amount you borrowed.
8. Will I be able to make principal payments?
Yes, you can always pay back part of the amount you borrowed plus the accumulated interest.
9. Can I make full repayment before the due date of the loan?
There is no due date for the loan you take out. The loan is covered by your crypto collateral and you can pay it back at any time you want.
10. What is the interest rate for the loan?
Like with every loan, you have to pay an interest rate. Cake charges you a flat 5% APR for any loan you take out.
11. Are there any fees associated with borrowing the loan?
There is a 0.5% origination fee which applies to every borrow. Besides that there are no other fees.
12. What happens if my loan repayment is overdue?
Your loan will not be overdue as long as you pay the interest and keep a healthy collateralization ratio. If your collateral drops below the 200% collateralization ratio, then your loan will get liquidated. Before that happens you have 24 hours to top up the collateral.
13. Can I take a loan against multiple coins as collateral?
You can use BTC, ETH, DFI, USDT or USDC as collateral. The collateral can be a combination of these cryptocurrencies as long as the DFI accounts for 50% of the collateral value.
14. How do I close my loan?
Closing a loan is very simple. All you have to do is to pay back the loan amount together with the accumulated interest.
15. Can I borrow multiple loans at the same time?
Yes, that is possible. But you have to make sure that each loan is sufficiently overcollateralized meaning your collateral is always at least double as much as what you borrow.
16. What happens if I get liquidated?
If your collateral drops below the 200% collateralization ratio, then your loan collateral will get liquidated. This means that your collateral will be used to automatically repay your loan. To avoid being liquidated, please top up your collateral or repay / partially repay your loan amount in time before your collateralization ratio drops below the 200%. You may be able to recover your collateral if you can increase your collateral to at least 200% or more within one hour of liquidation. Failure to do so will result in the loss of all your collateral. Should you choose not to top-up your collateral value, you may keep your borrowed assets.
17. Can I use the Borrow product on the website / browser?
Borrowing is only available on the Cake DeFi mobile app. You can find our Cake DeFi mobile app both on the Google Play Store and the Apple App Store:
18. How do I start using Borrow?
To get started with Borrow, please check our Simple Step-by-Step Guide: How to start using Cake DeFi "Borrow"