🛠️Protocol Features
Power tools for power users. Now live.
Supplying
Browse to the "Portfolio" or “Markets” pages and click on "Supply" for the asset you want to supply. Select that chain from which you would like to supply, and the amount and submit your transaction. Once the transaction is confirmed, your supply is successfully registered and you begin earning interest. Note that due to the cross-chain nature of Synonym transactions need to be relayed to the Hub through the Wormhole messaging protocol, thus transactions originating from chains other than Arbitrum could take up to 20 minutes. We intend to dramatically reduce this time in the near future using different methods of optimistic bridging and delivery.
Supplying USDC
Due to the native integration with Cross-Chain-Transfer-Protocol (CCTP) from Circle, Synonym is able to facilitate Supply transactions from any supported chain. As an example, if a user would like to Supply USDC on Arbitrum but their USDC balance is on Ethereum, they would be able to facilitate the Bridging and Supply transaction all in one bundle. No need to Bridge and Deposit! You can learn more about Circle's CCTP here.
Collateral
All supplied assets are automatically used as collateral, as we currently do not support choosing collateral assets. If you do not want to use certain assets as collateral, but would still like to supply them, please use a different wallet.
Collateralization Ratio
Collateralization Ratio is the numeric representation of the safety of your deposited assets against the borrowed assets and its underlying value. The higher the value is, the safer the state of your funds are against a liquidation scenario. At collateralization ratio of 100% you will be liquidated.
How much will I earn?
Suppliers are streamed interest payments on loans. Suppliers share the interests paid by borrowers corresponding to the average borrow rate times the utilization rate. The higher the utilization of a reserve the higher the yield for suppliers.
Note that each asset has its own market of supply and demand with its own APY (Annual Percentage Yield) which depends on its unique Interest Rate curve and Asset Utilization. You can learn more about the interest rate of each asset via the Markets Page.
Is there a minimum or maximum amount to supply?
There is no minimum supply amount, although it is important to take gas and relay costs into consideration when initiating a transaction as the gas cost could be higher than the supplied amount. There are maximum supply amounts stipulated for each asset for risk management, as such, please be mindful of limits if you are supplying a large amount. You can learn more about the supply caps of each asset via the Markets Page.
How do I withdraw?
To withdraw assets, please navigate to the “Portfolio” page, and in the “Supplied Assets” modal, click “Withdraw” under the preferred asset.
When withdrawing, be mindful of the collateralization ratio. Withdrawing reduces the collateral of your position and, if assets are borrowed, could put the position at risk of liquidation.
Borrowing
Before borrowing you need to supply any asset to be used as collateral. Please refer to the Supply section to get started. As Synonym is built on the Wormhole messaging protocol, collateral is natively cross chain. Collateral supplied on any supported chain can be used to borrow assets on the same, or any other supported chain without the need to bridge.
After supplying collateral, simply head to the “Portfolio” or “Markets” sections and select an asset and a chain on which you would like to borrow. Set the amount you need based on your available assets that would be used as a collateral for the loan.
What happens when my Collateralization Ratio falls?
Depending on the value fluctuation of your supplies and borrows, the collateralization ratio will increase or decrease. If your collateralization ratio increases, it will improve your borrow position by making the liquidation threshold more unlikely to be reached. In the case that the value of your collateralised assets against the borrowed assets decreases instead, the collateralization ratio is also decreased, causing the risk of liquidation to increase.
Repaying
To repay your loan please head to “Portfolio” and click “Repay” under the Borrowed assets modal. You repay your loan in the same asset and chain that you borrowed, as such if ETH was borrowed on Optimism, to repay the position a user would need to repay the same asset.
Repaying USDC
Due to the native integration with Cross-Chain-Transfer-Protocol (CCTP) from Circle, Synonym is able to facilitate Repayment of debt from any supported chain. As an example, if a user would like to Repay a USDC loan on Arbitrum but their USDC balance is on Ethereum, they would be able to facilitate the Bridging and Supply transaction all in one bundle. No need to Bridge and Repay!
How much would I pay in interest?
The interest rate you pay for borrowing assets depends on two factors:
Utilization Rate which is derived from the supply and demand ratio of the asset.
Unique interest rate curve that will be different per every asset. Please navigate to the Markets page to learn more.
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