# Borrow

Once users deposit tokens as collateral, they can borrow other tokens up to a certain limit. This borrowing capacity is capped, and the maximum amount a user can borrow is determined by the following formula:

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The borrowing limit is calculated by multiplying the deposited token values by their respective collateral factors and summing the results.

Collateral factors, ranging from 0 to 0.9, are assigned based on the token's price volatility and liquidity. The collateral value is calculated using the Time-Weighted Average Price (TWAP) from exchanges.

Additionally, each token has a specified borrow cap, which is the maximum allowable borrowing amount for that particular token. These caps help maintain a controlled borrowing environment, mitigate risk, and ensure protocol stability. The borrow cap for each asset may vary due to factors such as price volatility, liquidity, or governance decisions.