What it is
Post holdings you intend to keep as collateral and draw stablecoins against them. The exposure stays on your book; the borrow funds whatever needed the cash. This is the simplest pattern in the section, and the base case for the other three.Mechanics on AGI3
- Open a borrow position in a market pairing your holding with a stablecoin; the steps are in Borrow against collateral.
- The drawn stablecoins arrive in the portfolio’s wallet, yours to deploy on the platform or off it.
- One position per purpose reads better than one large position. Positions do not cross-collateralize, so a financing drawn for one mandate cannot be pulled down by another’s.
- The per-class table in Risk parameters sets the ceiling: 80% max borrowable LTV against blue-chip crypto, lower against tokenized gold, index tokens, and tokenized stocks.
When it fits
- The holding is one you would not sell at current prices, and the cash need is real, bounded, and fundable at a floating rate.
- The use of proceeds returns more than the borrow costs, or funds an obligation whose alternative is worse than the interest.
- The horizon is one you can hold through rate rises: the borrow rate floats for the life of the draw.
What it costs
- Interest accrues continuously on the drawn amount at the market’s floating borrow rate. There is no term and no fixed rate.
- The collateral is encumbered: withdrawable only down to what the remaining debt requires.
- Network fees at entry (two transactions where a first-time approval is needed) and one per action after that.
How it fails
- The defining risk is the financing failure pattern: the borrowed cash is deployed elsewhere at exactly the moment the collateral falls, so the top-up is needed when the liquidity is gone. This is why the top-up plan is decided at entry rather than at the margin call.
- Rates escalate: utilization rises, the borrow rate follows, and a cheap financing becomes an expensive one with no price movement at all.
- Interest drifts: debt grows continuously, so LTV rises even in a flat market, and a financing left unattended walks toward its liquidation threshold.
- Parameters get revised: a lowered liquidation threshold applies to positions already open.
Managing it
- Open in the Healthy band (health factor above 2.00) and set the review line at the Stable band. The margin call warning is the backstop, not the plan.
- Hold the top-up asset where it can move within hours, in a wallet already bound to the portfolio.
- Repay opportunistically: partial repayments restore headroom immediately, cut the running cost, and carry no penalty.
- Recheck the borrow rate on the cadence set out in Monitor positions and alerts; this position’s cost is a market variable, not a contract term.