# Borrowing

Borrowing in **Solana Market** allows you to unlock liquidity without selling your assets. You can borrow any supported token, as long as it’s not the same asset you’ve supplied as collateral.

This flexible model lets you use your idle assets to access liquidity across different tokens within the same market.

## How Borrowing Works

When you supply an asset (like USDC), it becomes your **collateral.**

You can then borrow another asset (e.g., SOL) based on your available borrowing power.

Your borrowing power depends on:

* The **value of your supplied collateral**.
* The **maximum Loan-to-Value (LTV)** allowed for each token.

Each asset has its own LTV, which defines how much you can borrow against it.

For example, If you supply **$100 USDC**, with **LTV of 60%**, you can borrow up to **$60 worth of other tokens** (e.g., SOL).

## Borrowing Formula

Your borrowing capacity is calculated as:

Your account’s **total borrowed value** must always stay **below the borrow limit.**

If it exceeds this limit, your position becomes **at risk of liquidation**.

## Borrow Rates

Borrowers pay interest on borrowed assets, known as the **Borrow Rate**.

Rates are dynamic — they adjust based on the **utilization rate** of each market (how much of the supplied liquidity is currently borrowed).

When utilization increases, the borrow rate also rises to encourage repayments and maintain healthy liquidity levels. The formula:

| Symbol | Meaning                                                                 |
| ------ | ----------------------------------------------------------------------- |
| Bt     | Current borrow interest rate                                            |
| BC     | Borrow rate at the **ceiling utilization** (max point)                  |
| BF     | Borrow rate at the **floor utilization** (base point)                   |
| Ut     | Current utilization rate                                                |
| Uc     | Utilization rate at the **ceiling knot point**                          |
| UF     | <p></p><p>Utilization rate at the <strong>floor knot point</strong></p> |

When utilization Ut is low, the borrow rate Bt stays close to the floor rate BF

As utilization approaches the ceiling UC, the rate increases toward BC.

This ensures stable borrowing costs when liquidity is abundant and protects the market from overutilization when liquidity is tight.

## Utilization Rate

**Utilization Rate** (**U)** is an indicator of the availability of capital within the pool, at time *t* is calculated as:

A high utilization rate indicates that a large amount of borrowing has occurred, while a low rate indicates abundant liquidity.

The interest rate model manages liquidity risk in the protocol through incentives:

* When capital is available: low interest rates to encourage borrowing.
* When capital is scarce: high interest rates to encourage repayments and additional supplying.