Borrowing

Composable Leverage on PulseChain

Borrowing

Borrowing happens through contracts called Glow Accounts. Each wallet can open any amount of Glow Accounts that are isolated between them.

Glow Accounts represent a paradigm shift in how leveraged trading works in DeFi. These aren't just smart contracts - they're sophisticated financial instruments that solve the fundamental trust problem in leverage trading. Traditional leverage requires borrowers to receive funds directly in their wallets, creating massive counterparty risk for lenders. Glow eliminates this risk entirely.

Think of a Glow Account as your personal DeFi trading vault - a smart contract that you control but cannot drain. This isolated environment holds both your collateral AND borrowed funds, executing your trading strategies while keeping lenders protected. You maintain complete control over position management, trading decisions, and strategy execution, but you cannot simply withdraw the borrowed capital.

Core Capabilities:

Isolated fund custody - All assets remain within the smart contract
Full trading control - Execute any approved strategy or trade
Multi-protocol integration - Access the entire PulseChain DeFi ecosystem
Leveraged position management - Up to 10x amplification of your capital
Advanced security features - Whitelist protection and automated safeguards

Account Creation Pathways

There are 3 main ways to create a glow account but fundamentally all these are the same. You can either just add collateral and borrow from borrow page, do the above but stake funds in a farm through Power farm and finally do the previous but from a Trading UI perspective.

Simple Borrow

For users who prefer a step-by-step approach, the BORROW page provides granular control over account setup. You can carefully configure collateral ratios, select specific debt assets, and gradually build your leveraged position with full transparency at each step.

Power Farms

Power Farm transforms the complex process of opening leveraged positions into a single, elegant transaction. This innovation lets you go from having no exposure to being fully positioned in your chosen strategy within seconds.

Power Farm Process:

Choose your debt asset - Select what you want to borrow (PLS, HEX, etc.)
Select collateral assets - Single or multi-asset collateral supported
Set leverage multiplier - Anywhere from 1.1x to 10x amplification
Pick farming strategy - Choose from integrated protocols and yield opportunities
Execute everything - One multicall transaction handles the entire setup

Example Power Farm Flow: You have 10,000 PLS and want 5x leveraged exposure to a HEX/PLS LP farm:

Deposit: 10,000 PLS collateral
Borrow: 40,000 PLS (4x your collateral)
Total position: 50,000 PLS equivalent
Strategy: Deployed into HEX/PLS LP with amplified yield
Result: 5x exposure to the farming opportunity with 5x the potential rewards

Leverage Trading

Each leverage action is actually just a borrow action followed by a swap.

Long strategies involve borrowing funds to purchase assets you expect to appreciate. GLOW's architecture makes this incredibly capital efficient - instead of buying 10,000 PLS with your pDAI, you can borrow additional funds to buy 40,000 PLS, amplifying both potential gains and exposure.

Example Long PLS/pDAI 5x Strategy:

You want to use 10,000 PLS as collateral

This action will borrow 40,000 PLS worth of pDAI then swap pDAI to PLS. Your new Glow account will end up with 50,000 worth of PLS. Your accounts value will increase if PLS/pDAI increases.

Short Positions - Profiting from Decline Short strategies involve borrowing assets to immediately sell them, expecting. Since you're borrowing the actual asset (not synthetic positions), you can deploy these assets across other protocols for additional yield while maintaining your short exposure.

Example Short HEX/PLS 5x Strategy:

You want to use 20,000 PLS as collateral

This action will borrow 80,000 PLS worth of HEX then swap HEX to PLS. Your new Glow account will end up with 100,000 worth of PLS. Your accounts value will increase if HEX/PLS drops.

Pro tip : you could stake the PLS in a power farm and earn additional yield !

Boosted Strategies - Composable Leverage The true innovation of GLOW lies in its composability. Your leveraged positions aren't limited to simple long/short trades - you can deploy borrowed capital across any whitelisted DeFi protocol, creating sophisticated yield strategies that would be impossible with traditional leverage.

Example Boosted Strategy:

Collateral: 15,000 PLS
Leverage: 4x
Total Capital: 60,000 PLS equivalent
Additional Yield: Stake PLS in a yield farming protocol
Result: 4x amplified farming rewards

Key Advantages Over Traditional Leverage

🔄 Real Asset Trading - No synthetic derivatives or complex instruments. You're trading actual tokens with real utility and value, not paper contracts that can disconnect from underlying assets.

📈 Zero Funding Rates - Unlike perpetual futures that charge ongoing funding fees based on long/short imbalances, GLOW uses real assets with no additional funding costs beyond your borrowing interest.

🏗️ True Composability - Integrate with the entire PulseChain DeFi ecosystem. Your leveraged positions can participate in any protocol, earning multiple yield streams simultaneously.

⚡ Capital Efficiency - Use the same collateral to access multiple strategies and protocols simultaneously, maximizing the productive use of your capital.

Glow Account

Management

Collateral Operations

Add Collateral - Strengthen position safety by depositing additional assets, improving your Health Factor and increasing borrowing capacity
Remove Collateral - Extract excess collateral when your Health Factor allows (must remain above 1.0), optimizing capital efficiency

Trading Execution All swap operations route through Piteas protocol, ensuring optimal execution and minimal slippage. The integration provides access to the deepest liquidity pools on PulseChain while maintaining the security benefits of the whitelist system. You can rebalance positions, take profits, cut losses, or completely restructure your strategy - all while funds remain safely isolated.

Debt Management

Borrow Additional Funds - Access more capital up to your maximum leverage limits, enabling position scaling or new opportunity capture
Repay Debt - Reduce borrowed amounts to improve Health Factor, lower interest costs, or prepare for collateral withdrawal

Revenue Model

GLOW captures 25% of the interest spread between borrowing and lending rates.

Example Breakdown

Borrowers pay: 30% APY
Lenders receive: 20% APY
Protocol spread: 10%
Protocol revenue: 2.5% (25% of spread)

Revenue Distribution (on $1M borrowed annually = $25K fees)

70% ($17,500) → NEON stakers (profit sharing)
25% ($6,250) → Insurance fund & operations
5% ($1,250) → NEON buybacks & burns

Closing a Glow Account

Option 1: Swap all assets to the underlying and repay the debt

The protocol will exchange all the non-underlying asset funds to the underlying asset on Piteas and repay your debt. You will receive the remaining funds to your personal wallet.

Choose the maximum size of the slippage that you will tolerate in the options page in the top right corner, and click Swap and get tokens button. If the price falls by more than the slippage while your trade is being confirmed, the trade will be reverted.

Option 2: Close a Glow Account by repaying the debt and keeping assets

You repay the loan with your own funds. This means you have more funds on your personal wallet. After repayment is done, the assets which were on your Glow Account will be sent to your wallet. This option is possible only if your personal wallet balance in the denominated asset is at least of the amount required for repaying the debt.

Health Factor & Safety

The Health Factor is a numeric representation of your account's financial health and safety. It serves as the primary indicator of liquidation risk for your Glow Account position.

Critical Safety Rule: If your Health Factor drops below 1.0, your position becomes eligible for liquidation. The higher your Health Factor, the safer your position.

The Health Factor is calculated using the following formula:

Hf(t) = TWV(t) / (b(t) + interest_accrued(t))

Where:

Hf(t) = Health Factor at time t
TWV(t) = Threshold Weighted Value at time t
b(t) = Borrowed amount at time t
interest_accrued(t) = Accumulated interest at time t

Mathematical Components

Total Value (TV)

The Total Value represents your Credit Account's total balance denominated in the underlying asset.

Formula:

TV(t) = Σ ci(t) × pi(t)

Where:

ci(t) = Balance of the i-th asset in your credit account
pi(t) = Price of the i-th asset calculated in underlying asset (from oracle)

Threshold Weighted Value (TWV)

The Threshold Weighted Value applies liquidation thresholds and quotas to determine the effective collateral value for Health Factor calculations.

Formula:

TWV(t) = ci(t) × pi(t) × LTi

Where:

ci(t) = Balance of the i-th asset in credit account
pi(t) = Price of the i-th asset in underlying asset (from oracle)
LTi = Liquidation threshold for the i-th asset

Liquidation System

When doing leverage with Glow, your Glow Account becomes the collateral for external protocols/actions: both your initial funds and the borrowed amount you got from the protocol. Glow Protocol sees which tokens your portfolio consists of and can determine its value at all times, which are always calculated in the underlying borrowed asset which you opened that Glow Account in.

When Liquidations Occur

Positions become liquidatable when Health Factor drops below 1.0, protecting lender capital.

Fee Structure (7% total)

3% → Passive lenders (insurance against bad debt)
4% → Liquidator reward (execution incentive)

Execution

GLOW team operates liquidation bots
Anyone can execute liquidations

Liquidations are there to protect liquidity providers' capital which by default shouldn't be exposed to directional market risk which traders & farmers take. As a leverage user - you can avoid liquidations, which also saves you from the fees paid to liquidators & the protocol.

What can I do if my Health Factor is close to 1?

In case you are in position which has correlated collateral to debt [like stablecoin debt to a stablecoin farm in Power Farming, or PLS debt to leveraged HEX position] - you can take higher leverage as the LTVs of your position <> debt are essentially correlated. As such, it allows you to take 9x+ leverage in some extreme cases. Still, beware that oracles can fluctuate, so don't max out.

1. Add collateral

The easiest method to improve your Health Factor is by adding more collateral.

2. Change your strategy or farm

If you are in a strategy that has a directional trade that's leading to the HF dropping, a possible better idea could be to change to a strategy with lesser volatile/base asset to preserve your Glow Account. If your debt is PLS and you are short PLS in a bull market... maybe join the PulseChain bull run, anon.

3. Decrease debt

Add some of the collateral back to the Glow Account in the form of the base asset you borrowed, this will help you lower your leverage and thus improve your health factor.

Practical Example

Let's walk through a Health Factor calculation:

Example Position

Collateral: 10,000 PLS (worth $1,000)
Borrowed: 4,000 PLS (worth $400)
PLS Liquidation Threshold: 85%

Calculation Steps

Total Value (TV):
```
TV = 10,000 PLS × $0.10 = $1,000
```

Threshold Weighted Value (TWV):

TWV = 10,000 PLS × $0.10 × 0.85 = $850

Health Factor:
```
Hf = $850 / $400 = 2.125
```

Result Analysis

With a Health Factor of 2.125, this position is in the Safe Zone and has significant buffer before liquidation risk.

HoloVault V2 : Become a Protocol Owner

HoloVault transforms NEON token holders into true protocol owners through sophisticated staking mechanics that align long-term interests with protocol success. Unlike simple token rewards, HoloVault distributes actual protocol profits to stakers, making them direct beneficiaries of GLOW's growth and adoption.

The system implements time-based reward multipliers that dramatically favor long-term commitment. This isn't arbitrary - it reflects the economic reality that protocols benefit most from stable, committed stakeholders who support long-term development rather than short-term speculation.

Weekly Distribution Schedule: Every week, 70% of protocol revenues flow into HoloVault for distribution to stakers. This creates a predictable income stream tied directly to protocol performance - as GLOW grows, your rewards grow proportionally.

Revenue Sources Include:

Interest spread capture (25% of borrowing-lending spread)
Liquidation penalty fees (3% of liquidated collateral)

7-Day Vesting Protection: When new rewards are added to HoloVault, they distribute over a 7-day period rather than instantly. This prevents sudden dilution and whale manipulation while ensuring steady reward flow for existing stakers.

Emergency Withdrawal System

GLOW recognizes that life circumstances can change, making even well-planned long-term commitments potentially problematic. The emergency withdrawal system provides an escape valve while maintaining protocol stability through economic incentives.

Penalty Structure:

Regular stakes (unlocked): 1% penalty fee (100% sent to Auction Vault)
Locked stakes (any duration): 30% penalty fee (50% sent to Auction Vault and 50% to remaining stakers as rewards)

When to Consider Emergency Withdrawal:

Genuine financial emergencies requiring immediate liquidity
Major life changes affecting your investment timeline
Loss of confidence in protocol fundamentals (though consider partial rather than full exit)

In Holovault v2 users are rewarded with Lending POOL tokens (nPLS for example). This means you keep earning APY even after claiming. To get the underlying token (PLS for example), simply go to the appropriate pool and hit withdraw.

Risks and Disclaimers

Oracle Risk

GLOW uses Oracles . Oracle failures or incorrect data can cause cascading liquidations and bad debt.

Smart Contract Risk

Complex smart contracts may contain bugs, vulnerabilities, or be exploited in unintended ways, leading to partial or complete loss of funds.

Third-Party Protocol Risk

Lender assets are exposed to integrated protocols. Exploits on these protocols can result in loss of lender capital. That is why we will have limits in deposits that will be increasing slowly to accomodate growth.

Liquidation Failures

Liquidators may malfunction or fail to perform, potentially under-collateralizing the protocol and causing Lenders losses. However fees are creating an insurance fund that automatically covers any bad debt created from delayed liquidations.

Withdrawal Limitations

High pool utilization may temporarily prevent withdrawals when most liquidity is actively borrowed. But during that period lenders will enjoy very high APR.

User Responsibilities

By using GLOW Protocol, you accept risks of:

Total loss of funds
Liquidation and fees
Smart contract vulnerabilities
Market volatility
Technical failures

Getting Started

Choose Your Role - Lender, Borrower, or Staker
Connect Your Wallet to PulseChain
Start Small - Test with modest amounts initially
Monitor Health Factors - Keep positions safe
Join the Community - Stay updated on protocol developments

GLOW Protocol: Where leverage meets composability on PulseChain

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Last updated 1 day ago