Borrowing $AXD

Introduction

On Aesyx users can deposit supported Assets — such as sAVAX and BTC.b — as Collateral to borrow $AXD.

Once you supply Collateral, it is transferred into the Aesyx smart contract system, enabling fully permissionless, over-collateralized borrowing.

Borrower Interest Rates are set by the user, which needs to be managed to avoid redemptions. To ensure fairness and prevent Redemption manipulation, Aesyx applies upfront borrowing fees and cooldown-based Premature Adjustment Fees when users open or modify their Troves.

How to Borrow $AXD

Step 1: Connect Your Wallet

Press “Connect Wallet” and choose your preferred wallet provider connected to the account holding the Assets you want to use as Collateral.

Step 2: Select a Token to Use as Collateral

Once connected, head to the “Borrow” page.

There, you’ll find the New Positions table listing all supported Collateral types, your available token balances, and current parameters.

Find the Asset you wish to deposit and click the “Borrow” button next to it.

Step 3: Choose Collateral Amount and Borrow Amount

In the side modal that appears:

• Select how much Collateral you want to supply.

• Choose how much $AXD you want to borrow.

Make sure your new Trove maintains a healthy Collateralization Ratio (CR) to avoid Liquidation risks.

Step 4: Set Your Interest Rate

By default, your borrow Position will receive the median fixed Interest Rate.

However, on Aesyx, you can manually choose your Interest Rate:

• Click the gear icon on the modal.

• Adjust the slider to select your preferred Interest Rate.

Remember:

• Lower Interest Rates are redeemed first when $AXD is trading below peg (at or under $0.995).

• You can learn more about Redemptions in the Redemption section of the Aesyx docs.

Step 5: Approve Token Transfer

After setting your Collateral and borrow amounts, click “Confirm.”

Your wallet will prompt a transaction or signature request.

You must approve this before proceeding to supply your Collateral.

Step 6: Finalize Your Supply and Borrow Transaction

After granting approval, you’ll be prompted for one final transaction:

• Confirm your Collateral deposit.

• Confirm your $AXD borrow amount.

Once this transaction is confirmed, your Trove will be created — and you’re all set!

The process usually finalizes within a few seconds.

Upfront borrowing fees

An upfront borrowing fee is applied when a borrower:

• Opens a Trove

• Increases the debt of their Trove

The creates a cost for the borrower seeking to evade a redemption by closing and reopening their trove.

The upfront borrowing fee is equal to 7 days of average interest on the respective collateral branch. It is charged in AXD and is added to the Trove's debt.

Premature adjustment fees

Since redemptions are performed in order of Troves’ user-set interest rates, a “premature adjustment fee” mechanism is in place. Without it, low-interest rate borrowers could evade redemptions by sandwiching a redemption transaction with both an upward and downward interest rate adjustment, which in turn would unduly direct the redemption against higher-interest borrowers.

The premature adjustment fee works as so:

• When a Trove is opened, its lastInterestRateAdjTime property is set equal to the current time

• When a borrower adjusts their interest rate via adjustTroveInterestRate the system checks that the cooldown period has passed since their last interest rate adjustment

• If the adjustment is sooner it incurs an upfront fee (equal to 7 days of average interest of the respective branch) which is added to their debt.