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	Utilization rate at the floor knot point

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.