Borrowing Assets on the Fortress Protocol and Minting FAI
Fortress Protocol enables its users to effortlessly supply assets to the protocol and begin to earn compounded interest for doing so.This also means you can take our a credit line against the collateral you provided, and i'll explain how you are able to do that.
For my tutorial I am going to use .1 BNB supplied to the platform as an example. The .1 BNB was worth $53.36, and I was provided $32.01 in available credit.
On the "Borrow Market" page, you will see all the available money markets that Fortress offers, and their corresponding APY (compound interest). From this page, you are able to choose as asset, and borrow up to your available credit amount.
In the screenshot above, you can see the BUSD money market, and information regarding the interest rates and borrow limit ratio. In the image, it shows that you can borrow BUSD at a 4.76% APY, and you'll earn Fortress FTS tokens at 59.35% APY. As you can see, the incentive to supply and borrow assets is pretty impressive.
The "borrow limit" area shows you what your borrow limit would be if you borrowed the amount that you input. Generally, the lower the borrow limit percentage is, the safer you are from any potential liquidations in the future.
In this screenshot above, we can see the Bitcoin BTCB money market, and it is currently charging borrowers 3.25% APY, while rewarding borrowers with Fortress FTS at 65.75% APY. In this screenshot, I clicked on "safe max" which will automatically set a safe amount (very low risk of liquidation) to borrow.
For this step I am going to borrow $25 in BUSD as an example. Once you have input your desired borrow amount, click on "borrow" and confirm the wallet prompt.
In this screenshot above, you can see that I've now borrowed $25 of BUSD, which is 78% of my collateral borrow limit, and because I am earning FTS tokens at a greater APY than I am paying in APY interest for borrowing BUSD, I am technically EARNING 54.59% APY to borrow money.
In the screenshot, you may notice the "APY" for all the money markets is in green, and has an up arrow... That indicates you "net" EARN money from borrowing from these money markets.
There is another option when borrowing assets from the Fortress Protocol, and that's minting (creating) Fortress FAI stablecoins. FAI is a synthetic stablecoin created by the Fortress Protocol team, that uses an algorithm and is backed by a "basket" of cryptocurrencies to maintain stability.
Because the platform is dynamic, and the interest rates are always moving, the incentives to borrow or supply for each asset change, and FAI is another option borrowers on Fortress Protocol have to grow their assets. Fortress Protocol has also created the FAI Vault, to allow holders of FAI to stake their tokens for rewards.
To mint FAI you will need to go down the bottom right hand section that says "Mint / Repay FAI".
For this example, I have paid back my BUSD loan, and I am now going to mint 25 FAI stablecoins. The first time you visit the page, you will need to approve the ability for Fortress to access your wallet to mint FAI, and once you have done that, you will be presented with the screenshot above.
Once you have confirmed the wallet prompt, and the transaction has completed, you will be presented a page like this screenshot above. You can see I have 25 FAI and have the ability to pay back the 25 FAI at any point on the "Repay FAI" module. The best part about FAI in my opinion? The massive APY offered in the FAI Vault.
The FAI Vault is a place where FAI holders can stake their tokens, and currently receive 101.49% APY.
Lets stake the 25 FAI tokens we have, and we can do that by clicking on "max" on the "Available FAI to Stake: 25 FAI" module.
Click on "Stake" and you will be presented a wallet prompt, confirm that.In this screenshot I removed this wallets FTS balance
Now that my 25 FAI is staked in the FAI Vault, you can see I am now earning 101.49% APY(!) in compound interest for staking FAI stablecoins.