Borrow

Depositing Collateral and Borrowing MIM

Borrowing enables you to borrow MIM that you'll receive in your wallet by depositing (locking) collateral into a Cauldron.

To borrow MIM using Abracadabra, go to abracadabra.money and launch the app. This will take you to our community deployed and maintained interface.

From here, you can see all of the available cauldrons (markets), search for a specific one, filter and sort them however you like (by chain, by MIM availability, by APR, by TVL…)

The Abracadabra homepage shows available cauldrons

Once you have selected the markets you were interested in, the cauldron's page will open, showing you market-specifc information and allowing you to borrow MIM.

The Cauldron page. In this example, we're using wAVAX

The Cauldron page contains several parts, with the top layer giving us information about the market we've selected (here it's wAVAX).

  1. This enables you to switch between Borrow mode and Repay mode.

  2. This is where you select how much collateral you want to deposit Some cauldrons can accept the collateral in their wrapped (wAVAX) or naked (AVAX) versions. A switch enables you to go between the 2.

  3. Here you select how much MIM you want to borrow. The bar shows you the % you would have given the borrowed amount. It also shows the cauldron's . The closer you are to the MCR, the riskier the position. In this example, we're not using leverage, so we leave this unchecked. Learn more about leverage.

  4. This pane shows you how step 2 and 3 will impact your position, showing you the amount and value of the collateral deposited, the MIM you have to repay to exit fully your position and your .

  5. This pane gives information about the cauldron itself, including fees, risk parameters and MIM available. You can't borrow more MIM than what is available.

Once you have selected your parameters, the middle pane will show you what your borrow position will look like, after the transaction is successfully completed.

  • Collateral Deposited: Amount of collateral into the position and its USD value.

  • MIM to Repay: Total amount of MIM that will be owed after the position is opened. (it includes the Mint Fee)

  • Liquidation Price: Collateral price at which your borrow position will be liquidated.

  • Current Price: Current value of one unit of Collateral.

Liquidation Price

The liquidation price that is shown will always refer to the collateral that has been deposited to borrow MIM. A liquidation price of $26.8 means that if the price of AVAX drops to $26.8, your position is at risk of being liquidated. Please refer to the "Liquidations" section of the docs to learn more.

Opening a position

When you are finally ready to open a position, simply click on the "Add collateral and borrow" button.

Note that if this is your first time using Abracadabra, you may need to grant several approvals before you can open the position.

The final transaction will deposit the collateral into the Cauldron, borrow MIM and deposit them into your wallet. If you can't see MIM in your wallet, you can clic on the MIM logo in the top right corner of the page or refer to your wallet's own documentation.

Once the transaction is confirmed, the page will refresh to show the updated values.

Closing a position

In order to close your position, head over to the My Positions page, and click on the Manage button. This will bring you back to the Cauldron Page.

From there, clic on the Repay button to switch to repay mode.

The Repay interface is the exact opposite of the Borrow interface. It enables you to select how much MIM you want to repay, how much collateral you want to remove, and the consequence it would have on your position.

In this example, I selected the maximum amount of MIM to repay my debt fully, and removed the maximum amount of wAVAX. It will take the MIM from your wallet and repay your debt, make sure to have enough MIM before starting this process. I did not use the "Deleverage" option in this scenario. To learn more about it, go to the leverage section.

If this is your first time, you'll need to approve the use of MIM by DegenBox before using the Remove and Repay button.

While the interface allow you to repay and remove any custom amount, if you want to fully close your position (repay max and remove max) the "Close position" button is a shortcut to do so.

Because of the way cauldrons work, some dust may stay in the cauldron (which is why the interface is allowing me to remove 0.4999… instead of 0.5)

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