# Borrowing ## Set Account Visit [Scallop Dapp](https://app.scallop.io/) and connect your Sui wallet. ### Transferable Sub-accounts Scallop offers the flexibility for every user's Sui address to access up to 5 sub-accounts, including the primary account. This enables users to efficiently self-administer multiple positions concurrently. Once a user holds "Scallop Obligation Key", they can deposit into any sub-account without the need for repetitive approvals. Furthermore, no approvals are necessary to transfer assets and liabilities between sub-accounts, empowering users to easily isolate and segregate their collateral and debts according to their preferences. We calculate your collateral and your debt inside an object called `Obligation`. To mutate this object you will need an object called `Obligation Key`, each `Obligation Key` belongs to an `Obligation` object. So when you create an `Obligation` object for the first time, you will get `Obligation Key` in return and it will be stored inside your address. This `Obligation Key` is just like an NFT, it represents ownership and it’s transferable. Transferring your `Obligation Key` to the other address means you hand over your ownership of the `Obligation` to someone else. ## Collateral Assets The **Collateral Pools** allow borrowers to deposit collateral and obtain a percentage of borrowing capacity, but suppliers cannot earn any interest from the collateral pool. Borrowers who want to borrow from the asset pool must first deposit collateral into the collateral pools, your collateral will be stored safely inside your Obligation object. ## Collateral Weight To control the ratio of coins that can be borrowed out using a collateral coin, we need a parameter called **Collateral Weight** in each of the **Collateral Pools.** For example, if you deposited **1 BTC** to a **Collateral Pool** and the **BTC** price at the moment is $10,000. And the **Collateral Weight** of **the BTC Collateral Pool** is **70%**. That means you can only borrow out **70%** of your BTC coins value or equal to `$10,000 x 70% = $7,000` . Collateral Weight usually has a value below 1. How much you can borrow from the **assets pools** depends on your collateral values. Your collateral value is determined using this formula:
Any changes regarding the **Collateral Weight** of a collateral pool that you deposited into will affect your **Collateral Value**. ## Borrow Weight There are multiple coins that have a volatile price. One of the solutions to protecting users from volatile coins, we create a **borrow weight** feature so borrowing a volatile coin will be much “expensive”. The terms of expensive here mean you can only borrow less volatile coins with such collateral. Borrow weight will affect the amount of debt you have. This is how your debt is calculated:
For example, there are SUI and USDC assets pools. USDC has a more stable price than SUI, hence we set the **Borrow Weight** to be **1** and **1.25** respectively. and then you deposited 1 BTC that is worth $10,000 to the **collateral pool** with a **Collateral Weight** equal to **70%** and your collateral value is **$7,000** (70% of $10,000). Let’s say the price of USDC is $1 and the price of SUI is also $1. With $7,000 you can borrow out 7,000 USDC **but** for SUI you can only borrow out 5,600 SUI. ## Borrow/Outflow/Collateralization Rate Limits Scallop implements a dynamic constraint on the total sum of loans and withdrawals permitted, which can be adjusted for each asset and pool. As an illustration, a limit of $1M may be set for borrowing or withdrawing from the primary pool within a single 24-hour timeframe. ## Fee Flash Loans A flash loan is a type of loan where a user borrows assets with no upfront collateral and returns the borrowed assets within the same blockchain transaction. From the blockchain's perspective flash loans are held for a duration of 0 seconds, Scallop charges 0.1% of the flash loan amount is allocated to the protocol as income. (ignoring Sui gas fee costs). --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.scallop.io/scallop-lend/borrowing.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.