Borrow / Lend

To borrow stablecoins with HYPE as collateral, you will need to first add a Hyperliquid account to Velo. After a Hyperliquid account is added, the user's wallet can be connected and borrowing will be available to use.

Velo currently supports three lending protocols on the HyperEVM network:

• Felix

• Hyperlend

• Hyperdrive

The borrow UI in the Velo terminal is an interface for each protocol where the user directly interacts with the protocol's onchain contracts.

1

Add a Hyperliquid account

Create or add your Hyperliquid account in Velo so the account is available for borrowing actions.

2

Connect your wallet

After the Hyperliquid account is added, connect the user's wallet to enable borrowing through the Velo terminal.

Felix

The Felix lending market integrated with Velo is the Felix Vanilla Markets, which is a deployment of the Morpho Blue protocol.

On Morpho Blue (and hence on Felix Vanilla Markets as well), the positions are all isolated from each other. The collateral does not earn yield due the isolated model used, and borrow rates apply when borrowing assets.

Health Factor

To avoid liquidation on your Felix Vanilla Market position, the health factor needs to be above 1.0. Any health factor below 1.0 becomes eligeble for liquidation. More details can be found in the Morpho documentation.

A position is healthy when the Health Factor is greater than 1.0. When it falls below 1.0, the position becomes eligible for liquidation.

_{Source: Morpho documentation}

Hyperlend

Hyperlend is a fork of the Aave V3 contracts. This means that positions on Hyperlend share collaterals and borrows for all positions, and the collateral will earn supply yield and borrows have borrow rates that apply.

Health Factor

While the UI only allows supplying and borrowing of singular assets, the health factor represents the aggregated health factor that will reflect the same value as the one in Hyperlend's website/contract.

To avoid liquidation on Hyperlend the health factor needs to be above 1.0. Any health factor below 1.0 becomes eligeble for liquidation. More details can be found in the Hyperlend documentation.

Liquidation occurs when a borrower's health factor falls below 1, indicating that their collateral value no longer sufficiently covers their loan/debt value. This situation can arise if the collateral decreases in value or the borrowed debt increases in value relative to each other. During a liquidation, a portion of the borrower's debt is repaid, and this amount plus a liquidation fee is deducted from the available collateral. Consequently, the liquidated debt portion is repaid.

_{Source: Hyperlend documentation}

Hyperdrive

Hyperdrive's contracts are isolated borrowing markets, where collateral does not earn yield and where a borrow rate applies to borrows. The contracts are not open-source at the point of writing, and contracts have been audited.

Health Factor

To avoid liquidation on Hyperlend the health factor needs to be above 100.0. Any health factor below 100.0 becomes eligeble for liquidation. More details can be found in the Hyperdrive documentation. For Hyperdrive, there is a max health factor of 1000.0.

When your Health Score drops below 100 you are then exposed to the risk of being liquidated. It is therefore vital that you pay attention to your Health Score and when it gets too low, start to repay your liabilities or add more collateral to the market.

_{Source: Hyperdrive documentation}