Loan Farming — Step by Step
A quick guide on how to use the loan farming protocol, to provide Real Property Tokens as collateral for a credit line, helping you outperform the market. Following this step by step guide you will learn how to both access the protocol, provide collateral, take out a loan, and then when you are ready, to repay your loan and close your position.
- Proceed to https://terraland.io/home
2. In the top right corner, click on Log In, provide your email and password, and enter your user portal.
3. Ensure, that your wallet is connected. This can be done by looking in the bottom left corner of the page. If the blue button displays “connect wallet,” follow the next steps to connect your wallet. If you see your Terra wallet address, you can skip this next step.
- Click on Connect Wallet
- Click on your relevant wallet provider, and follow the wallet’s necessary steps to link your wallet
- Once completed, you will return to your user portal. The bottom left button should now display your wallet.
4. Additionally, ensure that you have the relevant Real Property Tokens (RPTs) that you will use for loan farming. Make sure you have claimed your RPTs, from the My Investments tab, where you will find the Claim Tokens button.
5. Continue to the Loan Farming tab.
6. In the calculator, follow the next steps in order to Provide Collateral:
- Select your Property with which you would like to use the Loan Farming protocol, it will turn blue. Ensure, that loan farming is available for that property. This can be checked by looking at the Loan Farming Status information for that property, displayed within each property card.
- In the Calculate section on the right, input the Loan Stake amount. This will be the amount of collateral you will provide into the Loan Farming protocol smart contract. Automatically, this value gets set to 100% of the RPTs you own (its value in $UST). This value is the nominal value of each RPT.
- Below, select the TIER of financing you would like to unlock. This will affect the amount of $TLANDs you will have to stake, in addition to providing your collateral. A selected tier is highlighted in gold. In the event when calculate is clicked in step (6), and a message in red appears underneath Required $TLAND at current market price, saying “Not Enough $TLAND,” it means you will have to purchase additional $TLAND and have it in your wallet that is connected for Loan Farming.
- Next, you can decide if you would like to adjust Return on Anchor value. This is the value that you expect your loan to grow by over the duration of your loan. In the meantime, Loan to Value and Net Rent Income is automatically inputted and locked, as it is dependent on each property.
- Once everything is filled, click the Calculate button. The calculations on the left get filled out, and you can check what your Estimated Total Yield will be.
7. Once the calculator is filled out, and everything is ready, click the Provide Collateral button.
8. In the popup, ensure all the information on top is correct: How many RPTs you are providing; how many $TLAND you are providing, max loan amount given in $UST based on what is provided.
9. Read the disclaimer, and click Accept Terms if you agree to the terms that are provided. Then, click Sign Agreement and confirm the transaction in your relevant wallet (eg. Go to your Terra Station wallet and click sign).
10. Now in the My Loans tab selected on the top of the page (you are automatically redirected to it when providing collateral). On the left side, you will find all your RPTs (from various properties) provided as collateral for loan farming. If this is your first time, you will only see the one blue tab. If you have multiple, make sure you select the relevant iteration of loan farming and its provided collateral that you would like to use.
11. In the Active Line on the right, go down to the amount to Borrow, to select how much $UST you would like, up to the maximum value you can take out. The amount you can take out is your provided collateral multiplied by the LTV, minus a small 0.01 $UST fee for transaction security purposes. Click Borrow. Ensure you confirm this transaction on your relevant wallet.
12. To ensure everything is being displayed correctly, you may want to refresh the page. On the top of the active line, you will see your Borrowed Amount with Loan Farming. This amount will now be in your relevant wallet. Use the funds in any way you would like.
13. When you are ready to repay your loan, however long you kept it for, return to the My Loans tab of the Loan Farming tab. Make sure you repay your loan before the close date of the loan farming, which is displayed for each property.
14. To repay the loan, go down towards the lower section of Active Line towards the Amount to Repay, and select how much you want to repay, or use the Full Repay button to end your active line. Click on Repay and accept the transaction on your relevant wallet. Keep in mind, repaying your loan does not close your position yet. While there is no risk of liquidating your position due to not repaying your loan, your collateral is still provided in the smart contract, locking your $TLAND stake, $TLAND APR reward earned over that time, and your $UST earned from Net Rent Income over the period.
15. When the collateral is withdrawn, all those funds get released into your wallet too.
16. To withdraw your collateral, on the left side, select the relevant loan, and click on the Withdraw button. Confirm the transaction in your relevant wallet.
17. The funds should now all be on your wallet. RPTs, $TLAND staked, $TLAND APR Reward, $UST Net Rent Income.
As always, if you have any issues feel free to contact us on Telegram and we will be more than happy to help!
With this guide, you have now successfully become one of the users on the frontier of innovation. Never before has real estate, as a real-world physical asset, been brought into the digital world with such utility. Using it as collateral, with zero value-change liquidation risk, is a first on the Terra blockchain.
