Ola Finance is a Lending-as-a-Service platform that allows anyone to create their own branded lending network at the click of a button. Each Lending Network (LeN) consists of a number of different tokens, determined by the network creator, which can be lent and borrowed. Ola each Lending Network (LeN) are independent, and risk from one LeN does not flow to another. Ola has lending networks deployed on BSC (Binance Smart Chain), Fantom, Fuse, Moonbeam, and Boba. After depositing your tokens, the pool will mint oTokens - or "receipt tokens" - and credit you. These oTokens show that you have supplied assets to one of Ola’s lending networks. When you go to withdraw your tokens from the supply side, the system will ask for those oTokens back - so make sure you hold on to them! Ola's Lending Networks rely on over-collateralized loans. After depositing your tokens and enabling them as collateral (click the button labeled "Collateral" next to your token in the app), you can borrow any of the available tokens from that same lending network.
Two ways you can get liquidated:
1) Value of the collateral token falls
2) Value of the borrowed token increases
In Ola the amount of liquidated at one time is set at 50% (ie. the Close Factor). To prevent liquidation do not borrow the maximum amount. Use stablecoin to lend and borrow. Monitor your position frequently for good health. Longer you have a loan more chances of liquidation so have a plan to repay the loan.
Lending and Borrowing on Ola Network
Ola finance provides support to BSC (Binance Smart Chain), Fantom, Fuse, Moonbeam, and Boba chains. I connected my Metamask Fantom wallet. So I picked Spritswap LeN on Fantom. There is Hector Len on Fantom as well. However, lending interest rates are low and borrow interest rates are high in Hector LeN compare to Spritswap LeN. Also, Spritswap is much larger community and has much more rewards for lenders and borrowers. I chose Spritswap by clicking Enter network. I have few buck of USDC left in my Fantom Metamask wallet I want to deposit into Ola's USDC lending pool. Currently it provides 4.7% APY on USDC. If you wanted to looping, which means deposit collateral and borrow against it. Use it to lend more. Use the lending in term to borrow more. As mention above you want to keep your Collateral ration ideally below 70%. Only borrow Stablecoins like fUSDT or FRAX. In this you can borrow fUSDT at 2.3% use it to buy USDC in Spritswap or Spookyswap to convert to USDC and continue your looping. This interest rate difference are very low for me to loop for longer. I am more interested in the possible airdrop that might happened in Ola Finance in the future.
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