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Borrowing Against Token Collateral

Use an ERC20 token you already hold as collateral to borrow a different token without selling your original asset. A common example: deposit WETH as collateral and borrow USDT0 to access liquidity while keeping your ETH exposure.

When to use this: You hold a token you don't want to sell but need liquidity in another asset. This works like borrowing on Aave or Euler.

Liquidation risk

If your collateral value falls enough that your Loan to Value(LTV) ratio reaches the liquidation threshold, your collateral can be partially liquidated. Monitor your position actively, especially during volatile market conditions.

Prerequisites​

  • Wallet that supports EIP-7702 connected to VII Finance (Here's the list of all wallets that are supported)
  • The token you want to use as collateral in your wallet (e.g. WETH)
  • Enough native gas token for transaction fees

Step 1: Open the Markets Page​

Navigate to Markets using the top navigation bar. You will land on the Create Positions page with the Tokens tab active.

Create Positions page — Tokens tab listing available vaults with Asset, Total supplied, Supply APY, Total Borrowed, and Borrow APY columns

Step 2: Find Your Collateral Token and Click Borrow​

Browse the table for the token you want to deposit as collateral (e.g. WETH). When you click Borrow on a token row, that token becomes your collateral in the position.

Hover the row. Supply, Borrow, and Leverage buttons appear on the right side.

Tokens table with WETH row hovered, showing Supply and Borrow action buttons on the right

Click Borrow.

Step 3: Configure Your Position​

You are now on the Create Position page with the Borrow tab active.

Create Position page — Borrow tab active, showing Supply (collateral) input and Borrow Asset (debt) input with position metrics

The right panel has two inputs:

  • Supply [token]: the amount of collateral you are depositing (the vault token you navigated from)
  • Borrow Asset [token]: the token you want to borrow and the amount

The left panel shows:

  • Liquidity, Max Multiplier, Max ROE: at a glance vault stats
  • Pair details tab: Oracle Price, Supply APY, Borrow APY, Max LTV, Liquidation LTV
  • Collateral [token] tab: LTV limits and risk parameters for your collateral
  • Debt [token] tab: borrow rate and liquidity for the debt token

Enter your collateral amount in the Supply field. Enter how much you want to borrow in the Borrow Asset field, or leave it and the form will accept just your collateral deposit.

Start conservatively

Starting with a lower borrow amount (lower LTV) gives you more buffer against price movements before hitting your liquidation threshold. You can always borrow more later from the Dashboard.

Step 4: Review Position Metrics​

As you enter amounts, the metrics panel updates in real time:

Borrow form with collateral and borrow amounts entered, showing LTV and liquidation price updating in the metrics panel

MetricWhat it means
Net APYNet yield after subtracting borrow interest from any supply earnings
Sub accountThe Euler sub-account that will hold this position (auto-selected)
Current PriceLive oracle price of your collateral asset
Liquidation PriceThe collateral price at which your position would be liquidated
Your LTVCurrent loan-to-value ratio. Shows how much you've borrowed relative to your collateral value
Liquidation LTVThe LTV cap at which your position can be liquidated
Estimated gas feeApproximate transaction cost
Know your liquidation price

Note the Liquidation Price before confirming. The greater the gap between the current price and the liquidation price, the safer your position.

Step 5: Confirm the Network and Submit​

If your wallet is on the wrong chain, a Switch Network button will appear. Click it and approve the switch in your wallet.

Once on the correct network, click the submit button. Your wallet confirms a batch transaction that deposits your collateral and borrows the requested amount in a single operation.

After confirmation, the borrowed tokens arrive in your main wallet. Your collateral is held in an Euler sub-account (a protocol-managed address derived from your wallet, shown as #0, #1, etc. in the Sub-account metric). You can have multiple independent borrow positions on separate sub-accounts simultaneously.

Approval is for the exact deposit amount

The ERC20 approval step approves the exact amount you are depositing, not an unlimited allowance. If you supply an amount in a future transaction, you will be asked to approve again.

Managing Your Borrow Position​

Go to Dashboard in the top navigation. Click the Borrow tab to see all your borrow positions.

Dashboard Borrow tab showing position cards with Collateral Value, Debt Value, Health Score, LTV, Liquidation LTV, and Edit Position button

Each card shows:

  • Token pair: collateral token / debt token icons and name, account, and network
  • Collateral Value: current USD value of your deposited collateral
  • Debt Value: current USD value of what you owe
  • Health Score: how far you are from liquidation (above 1.0 = safe)
  • LTV: current loan-to-value ratio
  • Liquidation LTV: the threshold at which liquidation can be triggered

Click Edit Position to open the position detail page.

View Position page showing Position Risk section (Health Score, LTV, Liquidation LTV) and Debt section (Repay / Borrow actions) and Collateral section (Supply / Withdraw / Disable actions)

From this page you can:

Debt section:

  • Repay: pay back debt to improve your health score
  • Borrow: increase your debt (lowers health score)

Collateral section:

  • Supply: add more collateral to improve your health score
  • Withdraw: remove collateral (only available if health score allows)
  • Disable: remove the asset from acting as collateral
Monitoring health

The Health Score should stay comfortably above 1.0. If it drops close to 1.0 due to collateral price decline, repay debt or supply more collateral to restore safety margin.