Repay & Withdraw

Settling Your Margin Account

In Vanna Protocol, the Repay & Withdraw feature allows traders to settle accrued interest on their borrowed margin and reclaim their principal collateral. While repayment of interest does not automatically result in withdrawal, initiating a withdrawal will trigger automatic repayment of any accrued interest and losses, ensuring the margin account remains healthy.

Repayment and Withdrawal Process

When traders want to withdraw their collateral, the system first calculates and deducts any accrued interest and margin losses from the principal collateral. Once these deductions are accounted for, the remaining collateral can be withdrawn.

• Accrued Interest & Loss Adjustment: Only the interest accrued during the borrowing period must be repaid, while margin losses are adjusted from the principal collateral during the withdrawal process. The debt is automatically liquidated if the collateral reaches the critical liquidation factor.

• Free Withdrawals: Traders can withdraw their collateral at any time, provided the remaining collateral value is higher than the accrued interest and losses. The collateral withdrawal automatically triggers the repayment of interest and losses.

Partial Repayments & Withdrawals

Partial repayments allow traders to pay off accumulated interest gradually, unlocking more collateral for withdrawal. Similarly, traders can initiate partial withdrawals as they settle interest over time, allowing flexibility in managing their assets.

Maintaining Account Health

The key to managing the Repay & Withdraw feature is to maintain a healthy health factor in the margin account. Withdrawing too much collateral without settling enough interest or covering margin losses can trigger liquidations, so it’s essential to carefully manage the account’s balance.