# Borrowing & Lending Process

#### Borrowing with IFICHI

IFICHI offers a streamlined process for borrowing assets, where users mint IFICHI's synthetic tokens, represented as hTokens. Here's a practical example using ETH as collateral:

1. **Deposit Collateral**: Suppose ETH is valued at $4,000. You deposit 0.5 ETH as collateral, equivalent to $2,000. Based on the typical 125% collateral ratio for ETH, you can borrow up to 1,600 hUSDC from available maturities.
2. **Borrowing hTokens**: On a specific date, say, Jan 31, you opt to borrow 1,000 hUSDCMar22, an hToken with a March 31 maturity date.
3. **Market Sale**: You then sell the hUSDCMar22 on the open market for approximately 987.9 USDC, effectively borrowing 987.9 USDC against your collateral, with a 1,000 USDC debt due in three months, equating to a 5% APR.
4. **Post-Maturity**: Upon reaching the maturity date (Mar 31), you can settle the 1,000 USDC debt and reclaim your collateral.

#### Lending on IFICHI

To engage in lending on IFICHI:

1. **Access Lending Interface**: Navigate to the "Lend" section on the IFICHI interface and choose a market.
2. **Lending Process**: Input the amount you wish to lend, select "Lend \[asset]" (e.g., "Lend USDC"), and approve the transaction in your wallet.

Lending with IFICHI involves purchasing hTokens at a discount, representing future cash flows. The interest earned is the difference between the hToken's face value and the purchase price.

**Fixed Interest Rate**: The rate depends on the automated market within IFICHI. The more you lend, the potential for a lower interest rate.

**Redemption and Early Exit**: hTokens can be held until maturity for principal plus interest or sold earlier. However, early redemption might yield varying returns based on current interest rates.

**No Redemption Deadline**: hTokens can be redeemed at any time post-maturity without a specific deadline.

**Example**: If you purchase 1,000 hUSDC expiring in March 2022 for 988 USDC on Jan 31, your implied interest rate is approximately 5% APR.