Borrow

Overview

Borrow is Qaay’s crypto-backed instant loan service. Users can borrow supported currencies against the real-time value of assets in their Account Credit Line. Repayment is flexible, with daily interest accrual. Qaay’s oracle-driven risk system continuously monitors collateral health and protects accounts through warnings and, if necessary, controlled liquidation.

Service Summary

Qaay Borrow enables users to access instant crypto-backed loans without selling their holdings, using assets in their Account Credit Line as continuously monitored collateral.

The service is designed for speed and flexibility. There is no mandatory installment schedule. (“open repayment”). Loans have a 24-month term and allow flexible, open repayment at the user’s discretion.

Borrow uses real-time risk controls. Qaay continuously values collateral, calculates risk using Credit Score and Credit Status zones, issues multi-stage warnings as risk increases, and, if necessary, activates protective automation, including controlled liquidation, to restore account safety.

The service integrates with Credit Line, Tier, Credit Score, Interest Accrual, Repay, Liquidation, and user-facing dashboards, including Portfolio, Credit Box, and Transactions.

Key Concepts

Term	Precise definition in Qaay (Borrow context)
Account	The user’s internal Qaay account structure (not the blockchain wallet), including at least Savings and Credit Line.
Credit Line	The highest amount you could borrow, based solely on your pledged assets and their LTV limits, before considering current debt or tier restrictions.
Savings	An internal account is typically used to hold, earn, or withdraw funds; it is distinct from your Credit Line Value.	.
Flexible Collateral	Collateral is the live total value of assets in the Credit Line, not a single locked asset. Users can change the collateral composition as long as risk limits are maintained.
Total Capacity	The maximum Credit Limit derived from the value of Credit Line Assets and per-asset LTV rules (credit/market parameters); details are available in Credit Box.
Available to Borrow	The borrowing amount a user can access is determined by their Tier constraints.
Asset Type	The group of assets available for borrowing, such as stablecoins and non-stablecoins, as prese Credit line Valuented in Qaay’s terminology and user interface.
USDx	USDx is an internal USD-referenced unit (not a token) used for display and accounting purposes.
LTV	Loan-to-Value rules are applied per crypto asset to determine how much each asset contributes to Total Capacity and risk thresholds. Users can refer to Credit Box for details.
Outstanding Loan	The user’s active debt balance increases when Borrow executes and is tracked separately from the Portfolio asset display.
Credit Score	A dynamic, real-time numeric risk indicator computed from the relationship between debt and Credit Line Value. Used for risk monitoring, not for setting Borrow limits.
Credit Status	The zone-based classification of Credit Score (Excellent/Healthy/Warning/Critical) communicates risk level and triggers protective workflows.
Liquidation Threshold	The collateral safety threshold. If collateral value falls below this threshold and the user does not act, Qaay triggers protective actions, including controlled liquidation.
Qaay Oracle	The backend risk and control logic that monitors markets and account risk, sends warnings, and can trigger protective automation, including liquidation.
Qaay Prism	A pricing microservice that aggregates sources and updates live valuations used across the platform, including collateral valuation.
APR	The borrowing rate, which is tier-dependent, is applied to the loan. It is recalculated and updated during Qaay’s periodic interest cycle.
Interest Repayment	A transaction type representing interest paid on an active loan.
Repay	The service or action used to repay principal and interest, reducing Outstanding Loan and improving risk metrics.
Credit Box	The user interface module that displays Borrow-related credit parameters, such as how Total Capacity is computed and the role of LTV per asset.

Key term	Source Service / Module	Functional Role
Credit Line Value	Credit Line	Stores collateral-eligible balances used by Borrow.
Total Capacity / LTV contribution	Qaay Oracle (risk parameters surfaced)	Credit Box displays how LTV per crypto impacts Total Capacity.
Available to Borrow	Tier system	Tier determines borrowing availability limits.
Credit Score / Credit Status	Credit Score engine	Computes and classifies real-time risk.
Pricing inputs	Qaay Prism	Prism is the authoritative price feed. Oracle uses it to trigger risk events and actions.
Outstanding Loan	Loan (Borrow domain)	Outstanding Loan increases when Borrow is used and is referenced in risk monitoring and dashboards.
Liquidation actions	Liquidation (Oracle-controlled)	Executed when risk crosses limits and the user does not respond.
Interest posting	Interest accrual	Interest updates every 24 hours and is recorded as a transaction.

Borrow :

• Available to Borrow: Your current maximum borrowing amount.

• Asset Type: The type/category of loan (Group of Stablecoins & non-Stablecoins).

• Stablecoins and non-stablecoins: The asset categories available for borrowing.

• Borrow Asset: The specific asset selected by the user to receive as the loan payout. This must be chosen before loan confirmation and cannot be changed after activation.

• Withdrawal Amount: The amount you request and receive as a loan, denominated in USDx.

• APR: The percentage you pay per year to borrow funds.

• USDx: A stablecoin used to display Available to Borrow and loan amounts.

Borrowing Logic Variable Definitions

Term	Shortform	Definition	Formula
Credit Line	CL	Maximum principal supported by pledged assets based on LTV. Calculated before debt and before tier constraints. Represents the full asset-backed line.	CL = Σ(asset_value_i × ltv_i)
Outstanding Loan	OP	Remaining unpaid principal currently owed by the user.	Ledger-derived value
Credit Limit	BC	Remaining asset-backed borrowing headroom after existing debt. Risk-based and independent of tier.	BC = max(0, CL − OP)
Borrowing Limit	BL	The maximum principal allowed based on the user tier. Policy constraint is independent of LTV.	Tier configuration value
Available to Borrow	BP	The amount the user can request right now, considering LTV, tier cap, and existing debt.	BP = max(0, min(CL, BL) − OP)
Upgradable Capacity	UC	Additional borrowing that would become available upon upgrading the user’s tier. Blocked only by tier constraints.	UC = max(0, CL − BL)

How Borrow Works

Borrow is Qaay’s way to convert crypto holdings into spending liquidity without selling long-term assets. Users hold assets in a Credit Line. Borrow lets users take out a loan in a supported currency while keeping their crypto as collateral. The process is instant and clear. There is no manual credit evaluation. Repayment is open, with no fixed due date or installment plan required.

Borrow solves the “liquidity vs. conviction” tradeoff in crypto. Users maintain asset exposure while accessing capital or spending assets. Qaay enables this by continuously valuing Credit Line assets and applying risk controls. Two limits guide users: Total Capacity (the maximum based on collateral/LTV) and Available to Borrow (the amount users can borrow based on Tier).

To ensure a safe experience, Borrow is integrated with Qaay’s automated risk controls. Credit risk is displayed as a real-time Credit Score with user-readable Credit Status zones. If collateral value drops or debt increases, Qaay issues staged warnings and allows time for users to take action, such as adding collateral, repaying, or reducing exposure. If risk exceeds the Liquidation Threshold and the user does not respond, Qaay can execute controlled protective automation, including liquidation, to restore account safety.

Service Description

Borrow is Qaay’s crypto-backed loan service that enables users to access liquidity from their crypto holdings without selling them. Users deposit crypto into Qaay, and once confirmed on the blockchain, these assets are credited to their Account Credit Line and become eligible as collateral. To request a loan, users select an Asset Type and a payout asset (Borrow Asset), then enter the desired Withdrawal Amount. Qaay then assesses whether the request meets the user’s Credit Limit and safety requirements.

A core feature of Qaay Borrow is Flexible Collateral. Instead of locking a single asset, Qaay treats the total live value of assets in the Credit Line as collateral. Users can change their collateral composition as often as needed, provided they stay within the platform’s safety limits, especially above the Liquidation Threshold. This design maximizes flexibility, allowing users to manage positions, rebalance holdings, or add collateral as markets move, while Qaay’s risk system continuously reevaluates collateral health.

Borrow capacity is defined by two limits: Total Capacity and Available to Borrow. Total Capacity is the maximum borrowing amount based on Credit Line collateral and per-asset LTV rules. Available to Borrow is the enforceable borrowing amount determined by the user’s Tier. Total Capacity is collateral/ LTV-driven, while Available to Borrow is Tier-based. Users should treat Available to Borrow as the operational ceiling for initiating a Borrow request.

Qaay uses USDx, an internal USD-referenced unit, to ensure stable, clear calculations. USDx standardizes the display of loan and debt values, minimizing the effect of minor stablecoin price fluctuations. Users may receive various supported assets as borrowed currency, but USDx remains the reference for displaying limits and measuring debt.

Risk management in Borrow is automated and continuous. Qaay’s pricing stack (Qaay Prism) aggregates prices from multiple sources, and Qaay’s Oracle analyses those inputs to derive final valuations used for collateral monitoring and protective controls. These valuations drive real-time risk assessment and form the basis for safety actions such as staged warnings and, if necessary, liquidation. This is why Borrow’s collateral and risk can change as market prices fluctuate: the system continually reevaluates the Credit Line and links it to the user’s debt.

User risk is communicated through Credit Score and Credit Status zones. Credit Score is a dynamic, real-time credit health indicator calculated based on the relationship between the outstanding loan and the user’s total Credit Line Value. Credit Status categorizes this health level into zones such as Excellent/Healthy/Warning/Critical so users can quickly understand whether they are in a safe range or approaching a risky range that requires action, such as repaying part of the Outstanding Loan or adding assets to the Credit Line. A higher displayed Credit Score indicates a stronger and safer position, while a lower Credit Score indicates increased risk.

Borrow Fee is a one-time fee charged when the borrow is issued. It is shown to the user before final confirmation and may vary depending on the user’s Tier.

Borrow Interest is calculated by the Qaay Oracle every 24 hours based on the user’s outstanding loan balance and their current Tier at the time of calculation. Once calculated, the interest amount is deducted first from the user’s Saving Account, and if the available balance is insufficient, from the user’s Credit Line.

Before finalizing a borrow request, users may select or modify the asset they wish to receive using the “Borrow Asset” option in the borrowing interface. Once the loan is activated, the selected borrowing currency becomes fixed and cannot be changed for that loan position.

Qaay does not apply traditional late-payment penalties and does not require fixed repayment installments. Each borrow position has a maximum repayment period of 2 years from the initial borrow date. During this period, users may repay in full or in part at any time. If the outstanding debt remains unpaid after the two-year period, the applicable APR will increase by 0.1%.

Borrow Rules & Conditions

A user can initiate Borrow only if all prerequisites and validation checks in Qaay’s model are met.

Users must have collateral assets in the Credit Line to proceed with Borrow. If the Credit Line is empty, users must first deposit or transfer assets into it. External deposits are credited after blockchain confirmation, and users can also transfer assets internally between Savings and the Credit Line, subject to collateral constraints.

Borrow pre-checks require both Total Capacity (collateral/LTV-driven) and Available to Borrow (Tier-driven) to be greater than zero. The requested Withdrawal Amount must not exceed Available to Borrow, which is the enforceable borrowing limit.

To submit a valid Borrow request, users must select a Asset Type and Borrow Asset from the supported options shown in the app. Borrow Asset can only be changed before final confirmation, not after loan activation.

Risk-threshold requirements are enforced as ongoing safety constraints, not only at origination. Qaay expects the collateral value and risk level to remain above the system’s safety limits; internal guidance illustrates that a loan should be backed by collateral with a buffer (an example states borrowing $1,000 implies maintaining about $1,200 of held assets), and the authoritative per-asset/per-account limits are governed by LTV and Liquidation Threshold parameters and are surfaced in the platform including Credit Box.

KYC is not required to use Borrow, as eligibility is based on Credit Line, Tier, and credit status. However, users may encounter compliance checks in related processes, such as large deposits, which can affect their ability to fund the Credit Line.

Upon successful execution of a Borrow request, Qaay applies specific system state changes and ongoing processes.

First, the user receives the borrowed asset in their Account Credit Line, increasing their visible asset holdings on the platform. The Portfolio reflects the received loan as an additional asset, but does not represent the user’s debt. Active debt is tracked separately as Outstanding Loan, which increases at loan activation and should be consulted to view liabilities.

Second, after the Borrow is completed, the system recalculates the user’s credit health. Because the user has used part of their Credit Limit, the Outstanding Loan increases, and the Available to borrow decreases. If the Credit Line Value does not increase at the same rate, the displayed Credit Score may become lower. In this case, the user’s Credit Status may also move from stronger zones, such as Excellent or Healthy, toward more sensitive zones, such as Warning or Critical.

Third, interest accrual begins and continues on a daily cycle. Qaay calculates interest on borrowed funds every 24 hours. The APR is Tier-dependent and may change if the user’s Tier changes. Interest-related transactions are recorded, distinguishing between “Interest Repayment” (interest paid on a loan) and “Interest Credit” (interest earned in other services).

Finally, monitoring and notifications are activated for the new debt state. Qaay’s oracle-driven risk layer monitors market prices and the account’s Credit Score in real time. As risk levels approach sensitive ranges, multi-step warnings are issued. In the highest-risk zone, Qaay may take protective actions, such as transferring Savings to the Credit Line or, if conditions persist beyond the Liquidation Threshold, triggering controlled liquidation to restore the account to a safer level.

The Credit Score is calculated as:

Credit Score = Outstanding Loan / Total Credit Line Assets

Risk Management & Liquidation

If liquidation is triggered, QAAY follows a set prioritization process. For users holding multiple cryptocurrencies in their Credit Line, liquidation starts with the asset with the highest LTV ratio and proceeds to those with lower LTV ratios.

The LTV ratio for each asset may vary by user Tier, but the liquidation priority always follows the order from highest to lowest LTV.

The liquidation process continues only to the extent necessary to restore the user’s Credit Status to a safe threshold. Once the predefined safety threshold is reached, the process stops, and the remaining assets remain active and available for use.

Borrow is not a standalone feature; it depends on multiple internal services and produces downstream updates. The list below expresses explicit dependencies and direction of interaction (→ means “calls/reads from” or “updates/writes to”).

Borrow → Credit Line: reads collateral-eligible Values and uses them as the base for Total Capacity and risk checks; Flexible Collateral is defined as the eligible portion of the total real-time value of assets held within the Account Credit Line.

Borrow → Tier system: reads Tier Status to enforce Available to Borrow and to determine tier-dependent borrowing interest.

Borrow → Credit Box: uses the same underlying credit parameters surfaced in Credit Box (including how per-asset LTV impacts Total Capacity); Credit Box is the user-facing reference for the user to understand their Available to Borrow drivers.

Borrow → Qaay Prism and → Qaay Oracle: Prism supplies aggregated live prices; Oracle uses these valuations to monitor risk continuously and to trigger warnings and protective actions (including liquidation).

Borrow → Outstanding Loan: The user’s debt after receiving a loan; this amount represents the current outstanding balance and is used in the Credit Score calculation and the user account risk assessment process.

Borrow → Credit Score engine: Credit Score updates dynamically based on the debt-to-collateral relationship and is displayed via Credit Status zones.

Borrow → Interest accrual and → Transactions: schedules/records daily interest computations and logs interest-related transactions (e.g., Interest Repayment) for auditability and user visibility.

Borrow ↔ Repay: Repay is the inverse user operation that reduces Outstanding Loan and risk, restoring borrowing headroom.

Borrow ↔ Deposit and ↔ Transfer: Deposit funds Credit Line from outside Qaay; Transfer moves assets inside Qaay between Savings and Credit Line, which can increase collateral value or free up capacity (Transfer may be constrained if assets are within collateral requirements).

Best Practices

A concise operational checklist for users to borrow safely in Qaay:

Begin by ensuring collateral exists where Qaay counts it. Confirm you hold assets in your Credit Line (not only in Savings). If needed, fund your Credit Line either by depositing crypto (external transfer into Qaay, credited after network confirmations) or by using an internal Transfer from Savings to Credit Line.

Before entering a Borrow Amount in USDx in USDx, review your limits on the Borrow screen and in the Credit Box. Ensure both Total Capacity and Available to Borrow are positive, noting that Available to Borrow is the enforceable cap set by your Tier. If Available to Borrow is low, increase collateral or improve your Tier to expand availability.

Initiate Borrow with the correct selections and conservative sizing. Choose the Asset Type and Borrow Asset, then enter a Withdrawal Amount comfortably below Available to Borrow to maintain a safety buffer. After activation, you cannot change the Borrow Asset for that loan, so confirm your choice before final approval.

After borrowing, shift focus to risk management. Borrowing increases the outstanding loan and may lower your displayed Credit Score if your Credit Line Value does not increase proportionally. A lower Credit Score may move your Credit Status toward higher-risk zones. Monitor Credit Status and maintain a buffer above the Liquidation Threshold. Users should maintain a collateral cushion (for example, about $1,300 for a $1,000 loan). The safest practice is to borrow below your maximum and add collateral early during volatility.

Respond early to warnings. Qaay issues multi-stage alerts as your Credit Status worsens; if you approach Warning/Critical zones, reduce risk by repaying part of the loan (Repay) and/or adding collateral to your Credit Line. If you do nothing and the account crosses the Liquidation Threshold, Qaay can trigger protective automation, including controlled liquidation, to bring risk back toward a safer target.

Qaay continuously monitors the value of collateral assets through the Qaay Prism pricing microservice and the platform’s risk evaluation engine. Market prices are updated in real time using aggregated data from multiple sources, and these updates directly affect the user’s Credit Score. When collateral value fluctuations push the Credit Score toward higher-risk zones, the system automatically generates warning notifications, allowing users to take corrective action before entering a critical risk condition.

The automated protective mechanisms operate so that, if a user’s Credit Status declines due to market volatility, increased exposure, or changes in asset value, the system responds through a structured protection process. When the Credit Status reaches the Warning zone, the system recalculates risk in real time, updates the Credit Score, and issues a notification encouraging preventive action. If no action is taken and the status moves into the Critical zone (Red), Qaay Oracle activates protective measures to preserve the user’s assets and Credit Score.

As part of the protective process in the Critical (Red) zone, funds from the Savings Account will be automatically transferred to the Credit Line to strengthen Flexible Collateral coverage.

If this transfer is not sufficient to restore stability, a limited portion of Credit Line assets may be automatically sold in the market to rebalance risk exposure. Once the Credit Status returns to the Green zone (Green), all automated protective actions are immediately stopped to ensure the user’s remaining assets stay fully preserved.

Finally, understand your dashboards: Portfolio shows assets, including borrowed funds, but does not represent liabilities. Always consult the Outstanding Loan for debt visibility and use Transactions to track interest-related postings (Interest vs. Repayment Interest Credit).