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What this is

Borrow lets you unlock liquidity from prediction market positions by depositing them as collateral. You keep market exposure while borrowing the chain’s collateral token (USDC on Polygon, USDT on BSC). Your account is cross-margined by default, meaning multiple positions contribute to a single borrowing limit.
Polygon (Polymarket): USDC
BSC (Opinion): USDT

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How it works (high level)

1

Approve collateral transfers (one-time)

Approve Varla to move your ERC1155 prediction market positions.
2

Deposit collateral

Deposit supported position IDs into VarlaCore.
3

Borrow stablecoins

Borrow up to your max borrow limit. Borrow power is computed using conservative oracle pricing.
4

Manage risk

Monitor health factor. Repay or add collateral to stay above HF 1.0.
5

Repay then withdraw

Repay principal + accrued interest to unlock collateral and withdraw.

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Core rules (the ones that matter)

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1) Health factor + liquidation threshold

Varla uses a health factor (HF): HF = collateralValue / debt If HF < 1.0, your account is eligible for liquidation. If HF ≥ 1.0, withdrawals/borrows that would drop you below 1.0 revert.

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Worked example

  1. Deposit: 1,000 shares @ 0.60each=0.60 each = 600 portfolio value
  2. LTV: Moderate tier = 65%
  3. Collateral value: 600×65600 × 65% = 390
  4. Borrow: $390 (max borrow, HF = 1.0)
  5. Price drops 40% to $0.36
  6. New collateral value: 1,000 × 0.36×650.36 × 65% = 234
  7. New HF: 234/234 / 390 = 0.6 → Liquidatable
Takeaway: A 40% price drop from max borrow triggers liquidation for Moderate tier positions.

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2) Tiered LTV defaults

Borrow power is computed from your deposited positions using tiered loan-to-value defaults: Conservative is 80%, Moderate is 65%, and Risk is 50%.
Tier LTV values are protocol defaults. Governance can adjust tier values and set per-position overrides (overrides can only reduce LTV, not increase it).

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3) Minimum borrow + dust rules

Minimum borrow is 10 units of the collateral token (e.g. 10 USDC / 10 USDT, based on token decimals). Partial repays are not allowed to leave “dust” debt: after a partial repay, remaining debt must be 0 or ≥ MIN_BORROW.

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4) Repay delay (anti-flashloan)

You must wait 1 minute after your most recent borrow before you can repay.

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Chain differences

On Polygon (Polymarket) the borrow token is USDC. On BSC (Opinion) the borrow token is USDT.

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What can block actions

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Deposits

Deposits are rejected if the position is not valid collateral. The most common reasons are stale pricing (oracle not updated within the staleness window), low liquidity, being inside the early-closure window near resolution, or governance manual invalidation.

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Borrow power vs liquidation behavior (important nuance)

For accounting and borrowing power, Varla treats unavailable prices as $0 to avoid read-path DoS. For liquidations, Varla adds stricter oracle guards: Liquidation is blocked if any non-zero collateral has an unavailable price, and liquidation is also blocked briefly after oracle recovery (a grace window). This prevents liquidation under partial pricing.