# Supply and Borrow

The Borrow and Lend module of OpenFi allows users to deposit tokenized real-world assets (RWA) as collateral and borrow stablecoins against them. It is designed to combine institutional-grade RWA with on-chain liquidity.

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#### 1. Supported Collateral

OpenFi integrates tokenized assets issued by regulated partners:

* **Equities (xStocks)**: Tokenized representations of publicly listed shares, enabling investors to collateralize equity positions on-chain.
* **Gold (MatrixDock)**: Tokens backed by custodied physical bullion, combining the stability of gold with on-chain programmability.
* **Money Market Funds (Asseto)**: Tokens backed by U.S. Treasuries and short-term commercial paper portfolios, offering low volatility and predictable yield.

These assets are selected to provide a diverse, lower-volatility collateral base compared to crypto-native assets.

<figure><img src="/files/Zq4OdRANJ0ZrkveZuQXD" alt=""><figcaption></figcaption></figure>

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#### 2. Borrowing Mechanism

1. Deposit: Users deposit tokenized RWAs into OpenFi’s lending contract.
2. Valuation: Oracles (via Chainlink) provide real-time pricing of the collateral.
3. Collateralization: The protocol assigns Loan-to-Value (LTV) ratios tailored to each asset class.
4. Borrowing: Users can withdraw stablecoins (USDC, USDT) against their collateral.
5. Repayment: Borrowers repay with interest to reclaim their collateral. If they fail, liquidation mechanisms apply.

This structure enables investors to unlock liquidity without selling their underlying RWA holdings

<figure><img src="/files/mwlvlmDBUPcL9B2TKFu8" alt=""><figcaption></figcaption></figure>


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