Bitfinex Borrow is a peer-to-peer (P2P) funding platform that allows users to borrow funds from other users by using their cryptocurrency or fiat assets as collateral. This addition to our funding market enables you to use your existing assets as collateral to borrow.
How do I request a loan?
- Login to your Bitfinex account or sign-up if you don’t have one yet.
Bitfinex Borrow is available to Basic Plus and above verified users and your verification level determines the borrowing options available to you.
For example, you must be fully verified in order to borrow fiat currencies.
If you have not verified yourself above Basic Plus, please visit bitfinex.com/verification to submit your application.
- Move or deposit enough Ethereum (ETH), Bitcoin (BTC), Litecoin (LTC), Polkadot (DOT),Ripple (XRP) EOS (EOS),UNUS SED LEO (LEO), Uniswap (UNI), Cardano (ADA), Chainlink (LINK), Tezos (XTZ), IOTA (IOTA) Cosmos (ATOM) or Solana (SOL) to your margin wallet, to be used as collateral for the funds you want to borrow.
The amount of borrowable funds differs according to the collateral type and the currency type that you are borrowing, depending on several factors, such as their quality and liquidity. Read more about collateral further down on this article.
- Visit Bitfinex Borrow and customise your borrow request according to your needs. Input the desired loan duration and amount, and select the type of collateral you wish to use, as seen in the form below:
Please note that the minimum amount you’re permitted to borrow is 100 USD equivalent, any amount lower than that won’t be accepted.
You can then choose the currency used as collateral and the required collateral amount will automatically update according to your borrowing amount.
If you wish to use all of your funds as collateral, you can also click on the “You have X.XXXX BTC” just below the “collateral amount” field to automatically populate that field with your full available collateral (showing you the maximum amount you can borrow).
- To confirm your request, click on Borrow. Your collateral will be locked and the requested funds (if you meet all the criteria) will instantly become available in your margin wallet for withdrawal.
- At this time, if you visit your Bitfinex main trading page, you will see a newly created margin position for your loan that can be increased if you decide to borrow more. To return the loan, you need only claim the position.
Note that if you choose to “close” your position, you would be trading against the current open position and therefore be using your collateral to make a trade for your borrowed funds.
- For more details on your borrowed funds and the positions opened, you can check your “Ledger Entries” (available by pressing on your balances box on the trading main page, as seen in the screenshot below) or your Reports > Ledgers.
Note that the “CREDIT” amount seen on the “Ledger Entries” may slightly differ from the amount shown on Bitfinex Borrow, because, in order to improve the user-experience, Bitfinex Borrow displays updated pricing roughly every 15 seconds (as opposed to in real-time). Bitfinex Borrow uses the last matched price it pulled from the exchange (current to 15 seconds). The amount displayed on Bitfinex Borrow could be bigger or smaller than the actual price used for purposes of the loan transaction, depending on market movement.
How are Interest Rates Calculated?
Note that you may choose to borrow on either a fixed interest rate or variable interest rate basis, depending on your needs.
If you are borrowing on a variable rate loan, your loan interest fee does not start until you take funds out of your margin wallet. Until you actually remove funds from your margin wallet, the balance you see is a hypothetical amount that you could potentially borrow based on the collateral you’ve provided and not guaranteed to be the same as, or reflective of the actual amount you are able to borrow when you try to initiate a loan transaction by removing funds from your margin wallet. When your loan starts, Bitfinex Borrow will automatically route and execute one or more market order loan transactions on your behalf to obtain the funds you wish to borrow from lenders in the Bitfinex financing order book. Each of those loans will have a set term, however Bitfinex Borrow will repeat the automatic routing and execution transaction described above on our behalf as those loans expire, until you repay the loan.
If you are borrowing on a fixed-rate loan, your loan starts as soon as you accept the offer and receive the borrowed funds. You’ll start paying interest right away, whether you leave your funds in your margin wallet or take them out. Your interest rate will be fixed for the term of the loan you agree upon with one of the lenders in the Bitfinex financing order book. If you do not repay the fixed-rate loan before it expires, Bitfinex Borrow will enter into a variable rate loan on your behalf to repay the fixed-rate loan when it expires.
How to Manually Set Up Borrow Rates?
Even though the system will automatically renew any funding loan when the period ends at the best rate within a minimum period, we would advise you to manage the rates according to your needs and situations to better suit your trading plans.
There’s no additional fee in doing so and you can find the steps below using an example with BTC as collateral to borrow USD:
- First, find the currency you are currently borrowing on the Funding page, in the example this would be the USD funding page;
- In the “Taken: Using” widget, you should see the amount, rate and expiration date of your current funding loan;
- Use the Funding form to get a new loan with a new interest rate, you can view the current funding market rates using the funding order book;
- Once your funding bid has been matched and executed, you will find it in “Taken: Unused”, meaning that it is not yet used in a position;
- You can now close your previous used loan in “Taken: Using” and your “Unused” loan will replace it, thereby manually setting up a new borrow rate.
How Does Collateral Work?
The successful creation of the loan would open a long or a short margin position with the collateral size determined based on the quality and liquidity of the collateral and the borrowed currency. If you are using cryptocurrency as collateral, you would then be opening a long position. If you are using fiat or TETHER USDt Tokens ("USDt") as collateral, you would be opening a short position. For example, if you want to borrow BTC and use USD as collateral, you would be opening a short position with Borrow. The borrower must ensure that the collateral remains above the minimum maintenance margin requirement, so as to not be liquidated. This position will be subject to PnL (Profit and Loss) and will be charged borrowing fees and interest.
The amount of borrowable funds differs according to the collateral type and the borrowed funds itself, depending on several factors, such as their quality and liquidity. This value is expressed by the initial margin requirement of the underlying margin pair. For example, If you’re using Bitcoin as collateral, you need to maintain the initial margin requirement of 111.11 %. So, if you’re borrowing $900, you would deposit $1,000 worth of BTC into your margin wallet as collateral for the loan
The amount of loan is subject to a minimum limit of US$100 equivalent for each collateral and borrowed currency pair.
How to Repay Borrowed Funds?
You can return the funds by depositing back the tokens or fiat currency you borrowed to your margin wallet. You can repay the loan, in whole or in part, at any time and doing so would automatically close or reduce the open margin position.
Note that if your position is still open, the funding will still be open and you will need to manually close it if you do not wish to use the funds anymore.
There is no “early payment” fee associated with repaying borrowed funds, however if you use the loan for less than 1 hour, you have to pay the interest for a minimum of one hour.
If you initially borrowed funds using a fixed-rate loan and you do not repay that loan before it expires Bitfinex Borrow will convert it to a variable rate loan by entering into a variable rate loan on your behalf in order to repay the fixed-rate loan when it expires.
What are the Fees?
Borrowers will pay a loan creation fee in an amount equal to the “maker fees” that would be applicable to the borrower if the loan transaction were an order on the exchange, as well as interest.
Lenders will pay a charge on the interest they collect through lending in the peer to peer funding market.
The interest charged for a variable rate loan will change throughout the term of the loan. At the time you start borrowing under a variable rate loan, Bitfinex Borrow will automatically route and execute one or more market order loan transactions on your behalf to obtain the funds you wish to borrow from lenders in the Bitfinex financing order book. Each of those loans will have a set term, however Bitfinex Borrow will repeat the automatic routing and execution transaction described above on your behalf as those loans expire, until you repay the loan. The rates, payment information and other information reflected on the Site regarding a variable interest rate loan represent an estimate, based on current market conditions. Those values are hypothetical and not guaranteed to be the same as, or reflective of the actual interest rate, payment obligations or other information applicable to a loan you may receive. Those values are provided for information purposes only and solely as a personal reference tool.
The interest charged for a fixed-rate loan is fixed for the term of the loan. You will agree on a rate and duration for the loan with the lender through Bitfinex Borrow. If you do not repay the fixed-rate loan before it expires, Bitfinex Borrow will convert it to a variable rate loan by entering into a variable rate loan on your behalf in order to repay the fixed-rate loan when it expires.
Visit our fees page for further details: https://www.bitfinex.com/fees/