> ## Documentation Index
> Fetch the complete documentation index at: https://docs.agi3.ae/llms.txt
> Use this file to discover all available pages before exploring further.

# Borrowing stablecoins

> Why an institution borrows against holdings instead of selling them, the risk framework every strategy shares, and how the four strategies differ.

Borrowing stablecoins against collateral converts holdings into deployable cash without a sale. The four strategies in this section are the recurring institutional patterns for doing it, from plain financing to leveraged carry.

AGI3 provides the actions, not the strategies. The platform executes supply, borrow, swap, and repay, each under the same [authorization model](/platform-basics/transaction-signing) and [risk parameters](/risk/risk-parameters) as any other position. It does not construct, rebalance, or unwind a strategy for you, and nothing in this section is a recommendation. Each page exists so the mechanics and the failure modes are clear before capital moves.

## Why borrow instead of sell

The same reasons come up across mandates:

* The exposure is meant to be kept: a sale ends it, while a borrow keeps it on the book and releases cash against it.
* A sale has consequences of its own: realizing a position can conflict with a mandate, a reporting period, or a target allocation. Whether those costs exceed the cost of borrowing is your own analysis; borrowing is what makes the comparison available.
* Speed and reversibility: a draw against posted collateral is one transaction, and repaying it restores the starting point. Unwinding and rebuilding a position is neither quick nor free.

## The framework every strategy shares

Whatever the borrow earns or funds, the debt side behaves the same way. Before entering any of these:

* Set a health-factor floor and treat it as policy. The [bands](/risk/health-factor) give the vocabulary: open in Healthy, review at Stable, act in Monitor. Decide the floor before the position exists.
* Assume both rates move. Borrow costs float with utilization, and so does anything the proceeds earn; [Net APY](/earning-yield/net-apy) shows how quickly a spread can invert.
* Know the liquidation math for your collateral class. Ceilings, buffers, and penalties differ by class; the table is in [Risk parameters](/risk/risk-parameters), and the cost of getting it wrong is in [How liquidation works](/risk/liquidation).
* Plan the exit before the entry: which asset tops the position up, which wallet holds it, and in what order the position unwinds. The [monitoring routine](/how-to/monitor-positions) keeps that plan current.
* Size against a bad day rather than the current price. The [portfolio health score](/risk/portfolio-health-score) stress-tests the book against a correlated crash; a strategy that only survives current prices is undersized.

## The four strategies

| Strategy                                                             | Horizon        | What the borrow does                                | Defining risk                                           |
| -------------------------------------------------------------------- | -------------- | --------------------------------------------------- | ------------------------------------------------------- |
| [Liquidity without selling](/strategies/liquidity-without-selling)   | Weeks to years | Funds activity elsewhere while holdings stay posted | Collateral drawdown forcing top-ups at the worst moment |
| [Treasury and working capital](/strategies/treasury-working-capital) | Days to months | Bridges operational cash timing                     | Treating market liquidity as a committed facility       |
| [Yield spread](/strategies/yield-spread)                             | Open-ended     | Earns the gap between two floating rates            | Spread inversion                                        |
| [Looping](/strategies/looping)                                       | Open-ended     | Multiplies exposure, and the spread on it           | Compressed liquidation buffer                           |

Each page follows the same structure: what it is, mechanics on AGI3, when it fits, what it costs, how it fails, and how it is managed.