# Borrowing

## Trove

A trove is where you deposit collateral and take out your loan. Each trove is linked to a Zephyr address. In concept, troves are similar to CDPs.

Troves maintain two balances - one for net assets and one for net liabilities denominated in zUSD. These amounts are adjustable by either adding or removing collateral or repaying debt and will have a direct effect on your trove's NAV.

### Deposits

You can deposit any amount of supported assets into a trove. There are no fees incurred when depositing assets.

### Fees

Zephyr incurs a one-time 0.3% borrow fee defined by the protocol's `originationRate`.

So, if you were to borrow $1000, the protocol would change a $3 fee to open your trove.

### Loan repayment

There is no repayment schedule for Zephyr-originated loans. Troves stay open indefinitely and remain open as long as the collateral is above the minimum collateral ratio.

### Liquidation

Upon liquidation of a trove, its collateral will be seized by the protocol and the trove will be closed. A liquidation thus results in a net loss of `9.09% (= 100% * 10 / 110)` of your collateral’s Dollar value.

## Collateral

Collateral is an asset that a borrower must provide to take out a zUSD loan. The collateral is then used to secure the value of the loan.

At mainnet launch, Zephyr will support the following interchain assets as collateral, with support for more coming soon:

* ATOM
* OSMO
* axlWETH
* axlUSDC
* ATOM/OSMO GAMM pool

### Collateral Ratio

The collateral ratio is the ratio between the dollar value of your trove's collateral (net assets) and debt (net liabilities). The collateral of your trove will fluctuate over time with the prices of the assets.&#x20;

For example: Let's say the price of ATOM is $25 and you deposit 1,000 ATOM. If you borrow 10,000zUSD, your trove's collateral ratio would be 250%.

If you took out $20,000, your collateral ratio would be at 125%.

### Minimum collateral ratio

The Minimum collateral ratio is the lowest ratio of debt to collateral that will not trigger liquidations unless the protocol is in recovery mode. This is a protocol parameter that is currently set to 110%.

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