> For the complete documentation index, see [llms.txt](https://taolend.gitbook.io/taolend-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://taolend.gitbook.io/taolend-docs/core-features/borrow.md).
# Borrow
> This section explains how to borrow TAO to obtain liquidity as a borrower on the Taolend platform.
***
## Borrowing Overview
### What Is Borrowing
As a borrower, you can obtain TAO liquidity by collateralizing ALPHA (Bittensor Subnet tokens) provided by lenders. Taolend operates with a P2P Offer matching mechanism, where the system automatically matches you with the most favorable Offer available.
> ❗️Important Notice: After the initial 3-day protection period, a loan may enter collection at any time. Borrowers are strongly advised to monitor their loan status closely and pay attention to email notifications to avoid missing critical actions.
### Borrow Flow Diagram
### How It Works
1. **Deposit ALPHA Collateral**
* Deposit ALPHA into the Taolend smart contract
* Collateral is fully managed by the smart contract
2. **Initiate Borrowing**
* Select the Borrow Amount
* The system automatically matches the best Offer (lowest Daily APR)
* Borrow with one click, TAO is credited instantly
3. **Repay or Refinance**
* Interest accrues daily and you may repay at any time
* Optionally refinance into a better Offer
* Collateral is automatically unlocked after repayment
### Costs and Fees
Borrowers are responsible for the following costs:
1. **Loan Interest**
* Daily APR: 0.01% – 1% (set by lenders)
* Calculated daily; longer durations result in higher interest
**Example**:
* Borrow Amount: 50 TAO
* Daily APR: 0.15%
* Duration: 15 days
```
Total Interest = 50 × 0.15% × 15 = 1.125 TAO
Amount Due = 51.125 TAO
```
***
## Preparation
### Step 1: Bridge Assets
Before borrowing, prepare the following:
1. **Bridge ALPHA**
* Bridge ALPHA from the Bittensor network to an EVM network
* Used as collateral
📖 See: [Bridge Assets](/taolend-docs/account/bridge-assets.md)
### Step 2: Register Account
1. **Connect Wallet**
* Visit [Taolend.io](https://Taolend.io)
* Click **Connect Wallet**
* Select MetaMask or another EVM wallet
2. **Register**
* Navigate to **Profile**
* Click **Register**
* Sign message
* Confirm registration transaction
📖 See: [Account Registration](/taolend-docs/account/registration.md)
### Step 3: Deposit ALPHA
1. **Open Deposit**
* Go to **Profile**
* Click **Deposit**
* Select the relevant Subnet
2. **Enter Amount**
* Input the Collateral Amount
* Ensure sufficient collateral
3. **Confirm**
* Review details
* Confirm in wallet
* Wait \~10–30 seconds for confirmation
📖 See: [Deposit and Withdraw](/taolend-docs/account/deposit-withdraw.md)
***
## Initiate Borrowing
### Step 1: Open Borrow Page
1. Click **Borrow** in the navigation
2. Click **Borrow** to start
### Step 2: Configure Parameters
#### 2.1 Select Subnet
Choose the Subnet where ALPHA is deposited.
**Notes**:
* Only Subnets with available Balance are selectable
* The system displays your available Balance per Subnet
#### 2.2 Enter Collateral Amount
* Cannot exceed Subnet Balance
* Collateral is locked until repayment
**Maximum Borrow Calculation**:
```
Borrow Amount = Collateral Amount × ALPHA Price × Maximum Acceptable Price
```
> System uses 90% of ALPHA price as price protection.
**Example**:
* Collateral Amount: 1000 ALPHA
* ALPHA Price: 0.05 TAO
* Maximum Acceptable Price: 60%
* Borrow Amount: 1 \~ 30 TAO
#### 2.3 Enter Borrow Amount
* Minimum: **1 TAO**
* Cannot exceed calculated maximum
**Best Practice**:
* Avoid borrowing the full limit
* Maintain a safety buffer against price volatility
#### 2.4 Automatic Offer Matching
The system selects the Offer with:
* The Best Daily APR
* Sufficient Amount
* Matching Subnet and pricing conditions
### Step 3: Confirm Borrow
1. Review:
* Borrow Amount
* Collateral Amount
* Daily APR
2. Click **Borrow**
3. Confirm transaction in wallet
4. Wait \~10–30 seconds
5. TAO is credited instantly and interest accrual begins
***
## Manage Loans
### View Active Loans
1. Open **Borrow**
2. Switch to **Active**
### Loan Lifecycle
#### Phase 1: Active (0–3 days)
* Interest accrues daily
* Repayment available anytime
* No collection risk
#### Phase 2: Minimum Period Completed (After 3 days)
* Lenders may initiate collection
* Loan remains usable
#### Phase 3: Collection (3 days)
* Loan flagged for collection
* Repay or Refinance urgently
#### Phase 4: Overdue
* All ALPHA collateral is forfeited
* Collateral transferred to lender
***
## Repayment
### Repay Loan
1. In **Borrow / Active**, click **Repay Loan**
2. Review:
* Principal
* Interest
* Total Amount
3. If Balance is insufficient, click **Deposit**
4. Confirm transaction
5. Collateral unlocks immediately
***
## Refinancing
### What Is Refinancing
Refinancing allows you to switch to a better Offer without manual repayment.
**Process**:
1. Identify a lower Daily APR Offer
2. Click **Refinance**
3. New Offer repays the old loan automatically
4. Any difference is settled
5. One transaction, lower cost
### Refinance Steps
1. Browse Market Offers
2. Click **Refinance**
3. Confirm new Offer details
4. Confirm transaction
5. New loan is active at lower rate
***
## Withdraw Collateral
After repayment:
1. Go to **Profile**
2. Click **Withdraw**
3. Select Subnet
4. Enter Amount or click **Max**
5. Confirm transaction
6. ALPHA is transferred to your wallet
📖 See: [Deposit and Withdraw](/taolend-docs/account/deposit-withdraw.md)