Skip to main content

This page walks through the core borrowing path. A small deposit, a modest borrow, and what to expect as redemptions reduce your balance over time.

  • Deposit ETH or USDC to mint MYT and start earning yield.
  • Borrow at about 20% LTV to mint alAssets, then swap them to USDC if you want working capital.
  • Watch scheduled redemptions reduce your debt while your full collateral keeps earning until maturity.

If you already know what you're looking for, jump straight to the relevant tutorial:

Prerequisites​

Connect a wallet on the target chain and keep a small balance of the native gas token. Hold ETH or USDC for your deposit.

Step 1 – Deposit to the MYT​

Deposit to MYT

Open Vaults, select Mix-ETH or Mix-USDC on your chain, and deposit. The vault will mint MYT at a rate equivalent to your underlying assets. From here on out, each MYT represents a growing claim on the underlying as strategies earn.

Step 2 – Borrow at 20% LTV​

Borrow at 20% LTV
Check the alAsset market price first

alAssets can trade slightly below 1:1 on the open market. If alUSD trades at 0.99 USDC, selling 200 alUSD yields ~198 USDC, which is a ~$2 upfront cost relative to your 200 alUSD of recorded debt. The dApp shows the current price and estimated proceeds before you confirm.

On the same vault page stay on Deposit / Borrow. Enter a borrow near 20% LTV, then mint alETH or alUSD, respectively.

If you need spendable funds, swap the alAsset to USDC. The borrower fee shown in the UI will apply when redemptions occur.

Before you confirm
  • Strategy mix: open the vault details to see the current MYT weight and ceilings for higher-risk buckets.
  • Health bar: note the Liquidation LTV marker. Keep a wide buffer to reduce the need for active position management.

Step 3 – Let it run​

The timeline below shows how this plays out in practice. Redemptions outpace yield in the first quarter, then yield overtakes — debt drops 57% in a year while collateral finishes above its starting value. No repayments, no interest, no action required.

Initial deposit$1,000 USDC
Borrow200 alUSD
Starting LTV20%
Vault APY15%
Redemption rate60% annual
Illustrative only.
Actual rates vary with
Transmuter activity.
alUSD market price·0.99 USDC; selling 200 alUSD yields ~198 USDC (approx. $2 upfront cost vs recorded debt)
Borrower fee·0.50% applied only at each redemption settlement, shown in dApp
Redemption timing·Redemptions settle continuously. Quarterly figures show the cumulative position at each checkpoint.
Position state · quarterly snapshots
StartT₀
Day 1: Loan opened200 alUSD mintedMYT earning yield
Collateral
$1,000
Debt
$200
Equity
$800
LTV 20.0%
You receive 200 alUSD. Swap it to USDC if you want working capital. The full $1,000 is earning in the MYT vault from day one.
Q13mo
Position at 3 months+$35.56 yield−$38.50 redeemed
Collateral
$996
Debt
$162
Equity
$834
LTV 16.2%
Redemptions outpaced yield this quarter and collateral dipped $4. But debt fell $38 while collateral only dropped $4. The asymmetry is already working.
Q26mo
Position at 6 months+$35.41 yield−$31.10 redeemed
Collateral
$1,000
Debt
$130
Equity
$870
LTV 13.0%
Yield flips ahead of redemptions. Debt is down 35% without a single payment. Collateral has recovered to its starting value.
Q39mo
Position at 9 months+$35.56 yield−$25.07 redeemed
Collateral
$1,010
Debt
$105
Equity
$905
LTV 10.4%
Yield is pulling further ahead. Collateral is above where it started while debt is nearly halved.
1 yrQ4
End of year one+$35.91 yield−$20.24 redeemed
Collateral
$1,025
Debt
$85
Equity
$940
LTV 8.3%
Debt down 57% without a single payment. Collateral 2.5% above day one. Equity up $140. Re-borrow whenever you want more capital.
1-Year summary
Debt cleared
−57.5%
$200 → $85 without repayment. Redemptions settled the balance automatically.
Collateral
+2.5%
$1,000 → $1,025. Borrowing did not erode the deposit, it finished above where it started.
Equity gain
+$140
$800 → $940 (+17.5%). Vault yield covered the redemption cost, while the base MYT return was not sacrificed.
Key insight

In Q1 redemptions slightly outpace yield while collateral dips just $4. From Q2 onwards yield overtakes redemptions as debt shrinks, and collateral climbs back above its starting value. Debt drops 57% while collateral finishes 2.5% above day one. The asymmetry is the core of self-repaying loans. And throughout all of it, the $200 you borrowed on day one has been yours to use. This capital cost you nothing net, because your deposit is worth more than when you started.

Collateral (MYT value)
Outstanding debt (alUSD)
Equity (collateral − debt)
15% vault APY · 60% annual redemption rate · illustrative only

Next steps​

Explore the concepts behind what you just did:

Or go deeper with the step-by-step tutorials: