How To Borrow USDL (Step-By-Step Guide)

3 min readSep 5, 2023

So you’re ready to collateralize your PLS holdings and mint USDL.

Use our Step-By-Step Guide to make sure you are borrowing USDL correctly.

Note: This guide is for PulseChain Testnet v4 ONLY. Once Liquid Loans exists on PulseChain Mainnet, the guide will be updated.

How To Borrow USDL

Step 1: Obtain PLS

In order to borrow USDL, you need PLS to lock in a vault as collateral.

If you need help, use our guide on How To Buy PLS.

Step 2: Visit The Liquid Loans dApp

The link for the dApp is here: https://testnet.liquidloans.io/#/

Step 3: Connect Wallet

Once you’ve signed into your wallet, click “Connect Wallet” in the top right corner of the dApp.

Choose Metamask Wallet or Other.

Step 4: Borrow USDL

Choose “Borrow USDL” from the left hand sidebar.

Choose the amount of PLS you want to collateralize and the amount of USDL you want to borrow.

We chose a 250% collateral ratio for safety.

Click Confirm.

Once the transaction is validated you have officially borrowed USDL!

Next Steps

There are many things you can do with your newly minted USDL:

Deposit it into the Stability Pool to earn rewards in PLS and LOAN Token
Provide LP on PulseX for the USDL:PLS pair. Use your LP tokens to earn LOAN token rewards within the Liquid Loans dApp.
Enjoy your liquidity to pay your bills, buy a house, or invest in another asset.

Considerations Before Borrowing

Opting to borrow USDL entails the potential drawback of jeopardizing your PLS holdings through a liquidation.

Even though your USDL remains intact, a liquidation would incur an immediate loss of up to 10%.

While liquidations have specific scenarios where they might be desirable (i.ie. stop loss during big market correction), most individuals will opt to avoid it.

As a prudent measure, it’s advisable to establish a robust collateral ratio, such as 250%.

If you opt for a collateral ratio lower than that, it’s essential to stay vigilant regarding downward price volatility of PLS.

Should you observe your collateral level nearing the 110% mark, it is smart to promptly repay your loan to avert the risk of liquidation.

In summary, borrowers should carefully manage their collateral ratios to mitigate the potential impact of liquidation, safeguarding their holdings and financial well-being.