Borrowing
One Loan, Endless Possibilities.
Most lending protocols make you juggle multiple vaults. Different assets, different loans, different liquidation risks. Complexity for no reason.
Ripe simplifies everything. Every asset you own — from ETH to memecoins to that jpeg you overpaid for — backs a single GREEN loan. Your entire portfolio determines your borrowing power. One position. One rate. One liquidation threshold.
Finally, borrowing that respects how people actually manage money.
How Borrowing Works
Unified Position Structure
In Ripe Protocol, all your collateral across all vaults backs a single, unified loan position. You don't have separate loans for each asset — instead, your entire collateral portfolio supports one consolidated debt position. This design simplifies management and maximizes capital efficiency.
The Credit Calculation Engine
Ripe's credit engine performs sophisticated calculations to determine your borrowing capacity:
Collateral Valuation: Each deposited asset is valued using real-time price feeds
LTV Application: Asset-specific loan-to-value ratios determine borrowing power
Term Weighting: Multiple assets create weighted average terms
Risk Assessment: Dynamic adjustments based on market conditions
This multi-factor approach ensures fair credit access while maintaining system security.
Weighted Debt Terms Explained
When you deposit multiple collateral types, Ripe doesn't just average your terms — it weights them based on each asset's contribution to your total borrowing power. Here's how it works:
Example Portfolio:
ETH: $10,000 value × 70% LTV = $7,000 borrowing power
WBTC: $5,000 value × 65% LTV = $3,250 borrowing power
USDC: $15,000 value × 90% LTV = $13,500 borrowing power
Total Borrowing Power = $23,750Weighted Interest Rate Calculation:
ETH weight: $7,000 / $23,750 = 29.5%
WBTC weight: $3,250 / $23,750 = 13.7%
USDC weight: $13,500 / $23,750 = 56.8%
If rates are: ETH 6%, WBTC 7%, USDC 4%
Your rate = (6% × 29.5%) + (7% × 13.7%) + (4% × 56.8%) = 5.0%This weighting applies to all debt terms: interest rates, liquidation thresholds, redemption thresholds, and origination fees. Assets with higher borrowing power have proportionally greater influence on your overall terms.
Key Safety Thresholds
Understanding Your Risk Levels
Three critical thresholds govern your position's safety. Understanding how they work — and how they work together — is essential for managing risk.
The Three Thresholds Explained
1. Loan-to-Value (LTV) Ratio: Your Borrowing Limit
The LTV determines your maximum borrowing capacity as a percentage of collateral value.
What it means: You can borrow up to this percentage of your collateral
Direction: Higher debt OR lower collateral value → Higher LTV usage (risky)
Example: 70% LTV on $10,000 collateral = $7,000 maximum borrow
2. Redemption Threshold: The Warning Zone
When your position becomes eligible for collateral redemption by GREEN holders.
What it means: Other users can pay off your debt and take equivalent collateral
How it's calculated: Position at risk when collateral < debt ÷ redemption threshold
Example with 80% threshold:
Your debt: $8,000 Redemption triggers when collateral < $10,000 (Because $8,000 ÷ 0.80 = $10,000)Purpose: Provides market-based deleveraging and early warning before liquidation
3. Liquidation Threshold: The Danger Zone
The critical point where forced liquidation begins to protect the protocol.
What it means: Your position will be liquidated
How it's calculated: Liquidation when collateral < debt ÷ liquidation threshold
Example with 90% threshold:
Your debt: $8,000 Liquidation triggers when collateral < $8,889 (Because $8,000 ÷ 0.90 = $8,889)No escape: Once triggered, liquidation proceeds automatically
How Thresholds Work Together: A Visual Guide
Here's a unified view of how all three thresholds create different risk zones:
COLLATERAL VALUE SCALE (for $6,000 debt)
←─────────────────────────────────────────────────────────────→
$10,000 $8,571 $7,500 $6,667 $0
[════ SAFE ZONE ════][CAUTION][REDEMPTION][LIQUIDATION]
✅ Healthy ⚠️ Warning 🚨 Danger 💀 Critical
│ │ │ │
│ │ │ └─ Liquidation (90%)
│ │ │ $6,000 ÷ 0.90 = $6,667
│ │ │
│ │ └─ Redemption (80%)
│ │ $6,000 ÷ 0.80 = $7,500
│ │
│ └─ Max Borrow/LTV (70%)
│ $6,000 ÷ 0.70 = $8,571
│
└─ Your Current Collateral: $10,000
(167% collateral ratio - very safe!)Understanding Each Zone:
🟢 SAFE ZONE (Below 70% LTV / Collateral > $8,571)
Status: Healthy position with borrowing capacity
Actions Available: Can borrow up to $7,000 total (70% max LTV)
Risk Level: None - full flexibility
What to do: Normal operations
🟡 CAUTION ZONE (70%-80% LTV / Collateral $8,571 - $7,500)
Status: Over max LTV but still protected
Actions Available: Cannot borrow more; can repay/add collateral
Risk Level: Medium - approaching danger
What to do: Consider reducing debt or adding collateral
🟠 REDEMPTION ZONE (80%-90% LTV / Collateral $7,500 - $6,667)
Status: Eligible for redemption
Actions Available: Anyone can pay your debt for collateral
Risk Level: High - active intervention needed
What to do: Urgently repay debt or add collateral
🔴 LIQUIDATION ZONE (Above 90% LTV / Collateral < $6,667)
Status: Automatic liquidation triggered
Actions Available: None - process is automatic
Risk Level: Critical - partial liquidation to restore health
What to do: Position will be partially liquidated until healthy again
The Critical Inverse Relationship
Unlike LTV which calculates forward (debt as % of collateral), redemption and liquidation thresholds work inversely — they define the minimum collateral required for a given debt level.
Quick Reference - Two Ways to View the Same Thresholds:
Max Borrow
Can borrow up to 70% of collateral
Need 143% collateral coverage
Need $8,571+ collateral
Redemption
Triggered at 80% debt-to-collateral
Need 125% collateral coverage
Need $7,500+ collateral
Liquidation
Triggered at 90% debt-to-collateral
Need 111% collateral coverage
Need $6,667+ collateral
What This Means:
As debt grows from interest → You approach thresholds
As collateral value drops → You approach thresholds
Higher threshold percentages = Tighter requirements = Less room for error
Understanding this inverse relationship helps you monitor the right metrics and take action before it's too late.
Dynamic Interest Rates
Base Rates vs Dynamic Adjustments
Important: Your normal interest rate is the weighted average from your collateral mix (as explained in "Weighted Debt Terms" above). Dynamic rate adjustments are an emergency mechanism that only activates during severe market stress — this is NOT the default state.
When Dynamic Rates Activate
Ripe monitors the GREEN/USDC liquidity pool as a health indicator. Under normal conditions, you simply pay your weighted base rate. Dynamic adjustments only trigger when GREEN is under significant peg pressure.
Key Point: Dynamic rates are a protective mechanism that may never activate. They exist to incentivize market corrections during extreme conditions, not to penalize everyday borrowing.
How Pool Monitoring Works:
Balanced State: 50% GREEN / 50% USDC → Base rates apply
Danger Zone: GREEN exceeds 60% of reference pool → Rate multipliers activate
Scaling Adjustments: Rates increase proportionally from 60% to 100% GREEN
Three-Layer Rate Adjustment
When imbalances occur, rates adjust through three mechanisms:
Ratio-Based Multiplier
Scales continuously based on pool composition
Higher GREEN percentage = Higher multiplier
Example: 65% GREEN might trigger a 1.5x multiplier, 80% GREEN a 2.5x multiplier
Time-Based Accumulation
Additional increases for sustained imbalances
Typically 0.01% per 100 blocks in danger zone (~3.3 minutes on Base)
Creates urgency for market correction
Maximum Rate Protection
Hard caps prevent excessive rates
Protocol maximum (e.g., 50% APR)
Protects borrowers from extreme borrow rates
Real Example:
Your weighted base rate (from collateral mix): 5% APR
This is what you pay under normal conditions!
If pool reaches 70% GREEN for 5,000 blocks (~2.8 hours on Base):
- Your base rate: 5% (unchanged)
- Dynamic multiplier: 2.0x = 10% total
- Time boost: 0.01% × 50 = 0.5%
- Temporary rate: 10.5% APR
When pool returns to balance:
- Dynamic adjustments deactivate
- You return to paying just your 5% base rateBorrowing Limits and Safety
Multi-Tiered Limit System
Ripe implements several limits to ensure sustainable growth:
1. Collateral-Based Limits
Fundamental constraint based on deposited value
Maximum = Sum of (Asset Value × LTV Ratio)
2. Per-User Debt Ceiling
Individual caps during protocol growth phase
Equal limits for all users
Gradually increased by governance
3. Global Debt Limit
System-wide GREEN supply cap
Prevents unlimited minting
Protects protocol stability
4. Interval Borrowing Limits
Time-based windows (e.g., per 1,000 blocks = ~33 minutes on Base)
Prevents flash loan attacks
Smooths borrowing demand
5. Minimum Debt Requirement
Starts at ~$10 during early protocol growth
Will increase gradually as protocol scales
Ensures position economic viability
Reduces system complexity
When borrowing, the most restrictive limit applies. This creates a robust framework that protects both individual users and the protocol.
The Borrowing Experience
Step-by-Step Process
Deposit Collateral: Add assets to Ripe vaults
Calculate Capacity: System determines your borrowing power
Choose Amount: Borrow up to your available limit
Pay Origination Fee: Small one-time fee (typically 0.5%)
Choose How to Receive: Option to receive as GREEN, auto-convert to sGREEN, or deposit directly into Stability Pool
Distribution Options
When borrowing, you can choose one of three ways to receive your funds:
Option 1: Direct GREEN
Receive standard GREEN stablecoins
Use immediately for any purpose (swap to USDC)
Most flexible option
Option 2: Auto-Convert to sGREEN
Borrowed GREEN automatically wrapped into yield-bearing sGREEN
Start earning yield immediately on borrowed funds
Potential for positive carry (yield > borrow rate)
No separate conversion transaction needed
Option 3: Direct to Stability Pool
Borrowed GREEN converted to sGREEN and deposited into Stability Pool in one transaction
Triple rewards: sGREEN yield + stability pool rewards + RIPE rewards
Participate in liquidations for discounted collateral
Maximum yield potential but least liquid option
Origination Fee (Daowry)
A one-time 0.5% fee on new borrows that:
Flows directly to sGREEN holders
Creates immediate protocol revenue
Aligns borrower and saver incentives
Example: Borrow 10,000 GREEN → Pay 50 GREEN fee → Receive 9,950 GREEN
Repayment Flexibility
Ripe Protocol offers complete repayment flexibility:
No prepayment penalties - Repay any amount at any time
No fixed terms - Keep your loan as long as needed
Partial payments allowed - Reduce debt incrementally
Instant debt reduction - Payments immediately lower your risk
This flexibility lets you manage debt according to your needs without restrictive schedules or penalties.
The Future of DeFi Borrowing
Forget the old way. No more portfolio fragmentation. No more wasted collateral. No more choosing between earning yield or accessing liquidity.
With Ripe, your stablecoins get treated like the safe assets they are while even your riskiest positions contribute something. Your yield positions keep earning while backing your loan. Dynamic rates protect the protocol without punishing everyday borrowers. And if things go south? Redemptions give you a buffer before liquidations even start.
This is borrowing rebuilt from first principles. One position that actually understands what a portfolio is.
Ready to experience unified borrowing? Your entire portfolio is waiting to work harder.
For technical implementation details, see the Credit Engine Technical Documentation.
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