How borrowing works

The steps in the app

1. Open Borrow and pick a stock token as collateral.
2. Enter how much to deposit. Max uses your wallet balance. Before you connect, the page shows an example amount.
3. Pick the dollar you want to borrow.
4. Move the loan to value slider. The app shows how much you borrow, the borrow rate, the health factor and the liquidation price.
5. Press the button. The app builds each transaction, checks it, and asks your wallet to sign.

Depositing and borrowing are separate transactions, so you sign more than once. On Solana that is 2 signatures. On Robinhood Chain it is up to 3: an approval for the exact amount of stock tokens, the deposit, then the borrow. If an approval is already in place, it is skipped.

The slider starts at about half of the maximum. You choose where to stop.

Collateral

Collateral is what backs your loan. In stockloan.fun it is a stock token: an xStock on Solana or a Robinhood Stock Token on Robinhood Chain. The app only lists stock tokens that the market currently allows as collateral. See supported assets.

Your collateral is valued at the oracle price, which is the price the protocol itself uses to decide on liquidations. This can differ a little from the price you see on a trading venue. The Stock page shows both.

On Solana, one Kamino position can hold several collateral tokens, and all of them back all of your loans together. On Robinhood Chain each stock is its own separate loan: the loan is backed only by that one stock.

Loan to value (LTV)

Loan to value is your debt divided by the value of your collateral. If you deposit $2,000 of stock tokens and borrow $1,000, your LTV is 50%.

Every stock token has a maximum LTV set by the protocol. The slider runs from 0% up to that maximum. The more you borrow, the closer you are to liquidation.

Two numbers per stock. On Kamino each token has a max LTV (how much you can borrow) and a liquidation threshold (the point where liquidation starts). The app shows both, for example on the Stock page and in the Borrow summary as "max LTV / liquidation".

One number on Robinhood Chain. A Morpho market has a single limit, called LLTV. The app uses it as both the max LTV and the liquidation threshold. That means that at the very end of the slider your health factor is about 1.00, and a tiny price drop liquidates you.

Borrow factor

On Kamino, a dollar asset can count a bit more than one for one against your limit. This is called the borrow factor. The app shows it in the Borrow summary only when it is above 100%. On Robinhood Chain it is always 100%.

Borrow rate

The borrow rate is variable. The protocol sets it from how much of the pool is already borrowed (called utilization). When more of the pool is borrowed, rates tend to rise.

The app shows the rate as Borrow APY, plus "Interest per year", which is your loan size times that rate. Both are estimates for today. They change as the market changes.

• Solana: the rate comes from Kamino's API. If that is not available, the app estimates it from the reserve's rate curve and the current utilization. Your own borrow is taken into account, because it moves utilization.
• Robinhood Chain: the rate comes from Morpho's API, or is read from the chain if the API is not available. The app projects how your own borrow would move the rate using the shape of Morpho's Adaptive Curve model (target utilization 90%).

Interest is added to your debt over time. There is no fixed repayment date, and nothing is due until you decide to repay.

Health factor

The health factor is one number that tells you how safe a loan is:

health factor = (collateral value x liquidation threshold) / debt

Above 1.00 your loan is safe from liquidation. Below 1.00 it can be liquidated. The app labels it like this:

• 1.60 or more: Healthy
• 1.25 up to 1.60: Okay
• 1.10 up to 1.25: Risky
• Below 1.10: Danger

With no debt, the app shows "No debt". On Robinhood Chain every stock is a separate loan, so the health shown on the dashboard is that of your weakest market.

Next to health, the app shows two helpful numbers:

• Drop to liquidation: how far your collateral can fall before liquidation, if nothing else changes.
• Liquidation price: the stock token price at which your health reaches 1.00.

Liquidation

If your health factor falls below 1.00, other people (liquidators) can repay part of your loan and take some of your collateral, plus a bonus. You lose that collateral. On Morpho there is no grace period.

stockloan.fun does not liquidate anyone. Liquidations are carried out by third parties inside Kamino and Morpho. You can avoid them by adding collateral, repaying part of the loan, or borrowing less to begin with.

Market hours and the Weekend Guard

The stocks behind these tokens trade on US exchanges, from 9:30 to 16:00 New York time on trading days. The tokens and the loans do not stop. Nights, weekends and holidays the real stock market is closed, so prices can only catch up when it reopens, and that can happen as one big jump.

• Solana: oracle prices stay inside a tight band near the last close while the market is shut.
• Robinhood Chain: the stock price feeds update 24 hours a day on weekdays (24/5), so the price stays near the last update while the market is shut.

The Weekend Guard is a box on the Borrow, Stock and Positions pages. It turns on during Friday and whenever a long closure is ahead. It shows:

• whether the US market is open, and how long until it reopens,
• how far your collateral can drop before liquidation,
• a stress gap that the app assumes for that stock, and whether your buffer covers it,
• a safer LTV (on the Borrow page, with a button to use it).

The stress gaps are fixed assumptions in the app, for example about 6% for the S&P 500 ETF, 15% for NVIDIA and 25% for the most volatile names. They are not predictions and a real gap can be larger. The safer LTV is the lower of the maximum LTV and the liquidation threshold reduced by that gap and a further 5%.

Repaying and withdrawing

Open Positions, or a stock's page, and press Repay next to the loan. Enter an amount or press Max.

• You can only repay with dollars that are in your wallet. Max is limited to your balance of that token. On Solana it allows a little extra to cover interest that builds up while the transaction is sent.
• On Robinhood Chain, repaying the whole loan repays it exactly, with no dust left. The approval includes a small buffer for interest that builds up before the transaction lands.

To get your collateral back, press Withdraw next to the deposit. While a loan is open, the maximum is what keeps your loan within its borrow limit. On Solana it is also limited by how much of that token is free in the pool. When the loan is fully repaid, you can withdraw all of it.

Checks before you sign

Every transaction is checked before your wallet is asked to sign. You can read the details in the review box.

• Solana: the app asks Kamino's public API for the transaction, then checks in your browser that you are the fee payer and that it calls Kamino Lend. It warns about any other program it does not expect. It then runs a preflight simulation. If the simulation cannot run, the wallet runs its own check.
• Robinhood Chain: the app builds the transaction itself. It only talks to a short list of verified contracts (Morpho Blue, USDG, the listed vaults and the stock tokens). It re-reads the market from the chain and recomputes its id, so a wrong market can never be signed. Approvals are for the exact amount. A transaction is never offered for signing unless its simulation passed.

These checks cannot protect you from bugs in the protocols themselves. See the risks.