# 246 Club in One Page
Source: https://docs.246club.xyz/docs/246-club-in-one-page
A concise summary of 246 Club’s features and user flows.
### Re-Lending
Re-Lending allows users to maximize yield by combining the baseline yield from Aave deposits with additional yield from 246 Club.
Re-Lenders remain passive, earning Aave's baseline yield plus additional returns captured from interest rate arbitrage activities of arbitrageurs.
Users supply either an **aToken** (e.g., aUSDC) or its **underlying asset** (e.g., USDC).
**What assets can be Re-Lent :**
* If you supply an underlying asset, it is first deposited into Aave to generate an aToken, which is then re-lent to 246 Club.
* If you supply an aToken directly, it is re-lent to 246 Club.
In both cases, the result is a **Re-Lending position** in the 246 Club market.
[**How it works (see Credit Delegation in the Re-Lend page):**](/docs/re-lend-supply/re-lend)
* When you lend to Aave (e.g., 100 USDC), you receive an aToken as a receipt of your deposit (e.g., 100 aUSDC) and gain borrowing power based on Aave’s LTV ratio. For example, with an 80% LTV, you can borrow up to 80 USDC.
* By re-lending your aToken (e.g., 100 aUSDC) to 246 Club, you delegate this borrowing power( e.g., 80USDC in this case ) to the protocol.
* Arbitrageurs on 246 Club utilize this borrowing power and pay additional interest (see [Interest Rate Model](/docs/architecture/interest-rate-model)), which generates the extra yield for your Re-Lending position.
> **Note on Arbitrageurs**: In 246 Club, arbitrageurs are active participants who borrow funds to execute cross-protocol strategies. While they function as borrowers in the system's loan mechanics, we use the term 'arbitrageur' to emphasize their role in identifying and capitalizing on market inefficiencies between different markets.
> You **cannot** borrow against a re-lending position from 246 Club.
### Cross-Protocol Arbitrage
Cross-Protocol Arbitrage allows arbitrageurs (who function as borrowers in the system) to capitalize on interest rate differentials between protocols. These users deposit collateral into one protocol (like Morpho) while simultaneously borrowing against it from another (like Aave), creating leveraged positions that profit from the spread between deposit and borrowing rates.
For example, if a Morpho Vault on USDC is yielding 10% while the Aave borrow rate is 5%, a user can capture the spread through cross-protocol arbitrage. By leveraging this position 10x, the user could earn an approximate net leveraged APY of 50% ((10% – 5%) × 10).
**How it works**:
* Arbitrageurs deposit assets into a Morpho Vault and borrow assets against it from Aave.
* If they don't have an existing Morpho position, 246 Club's user interface allows them to "zap" into a Morpho Vault position and immediately borrow against it from Aave.
* This setup enables interest rate arbitrage between yield from Morpho deposits and borrowing rates from Aave.
**Loan Management**:
* Once established, the leveraged arbitrage position must be maintained to ensure a healthy loan-to-value ratio, similar to looping from other lending markets. (see the [Managing Arbitrage Position](/docs/cross-protocol-arbitrage/managing-arbitrage-position) page for details)
# Interest Rate Model
Source: https://docs.246club.xyz/docs/architecture/interest-rate-model
How additional interest is priced to capture cross-protocol arbitrage and reward re-lenders.
### Design Principle
Interest Rate Model in the 246 Club is designed to intersect between two primary objectives.
* Unified Liquidity
* Market-based large unified liquidity pool.
* Pair Specific Sensitivity
* Interest rate sensitively reflects the pair-specific borrow demand.
The Challenge is that in the unified pool, the borrow rate is set by global utilization since asset pairs share the same liquidity.
## 246 Rate on top of Aave Rate
As a Re-Lending protocol, the Interest rate in the 246 Club applied to Re-Lenders and arbitrageurs differs from conventional lending protocols.
**For Arbitrageurs** : On top of the Aave borrow rate, arbitrageurs are charged with the 246 rate.
Aave borrow rate serves as a baseline borrow rate
**For Re-Lenders** : On top of the Aave supply rate, re-lenders earn the 246 rate from arbitrageurs.
Thus, the 246 rate solely depends on the utilization of each market in the 246 Club, isolated from Aave's. In other words, the interest rate based on supply and demand dynamics of 246 Club is applied on top of Aave's rate.
Below is how our interest rate model works in tandem with the supply and demand dynamics of 246 Club.
## Pair Specific Interest Rate
Each unified pool of each Market consists of a single borrow asset and multiple different collateral\*. Regardless of the number of collateral assets against which the borrow asset is exposed, as a unified pool, utilization is calculated by the total borrowed over the total borrowing power delegated in this market.
> \*More details on [Market Structure](docs/architecture/market-structure)
For example, in the \[*aUSDC*]USDC Market, the total supply of delegated USDC is 100. Various arbitrageurs have borrowed 20 USDC against Collateral A and 40 USDC against Collateral B. Regardless of the composition of each pair, utilization is calculated by the total borrowed, 60 USDC, over the total borrowing power delegated, 100 USDC, which is 60%.
Each pool regulates supply and demand dynamics based on this global utilization. Therefore, interest rates specific to each pair, within a single market, will have the same interest rate gradient and therefore experience the same rate of change in interest rate as well as optimal utilization.
To make the rates of each pair more specific to the risk-return profile of each pair, 246 Club applies a pair-specific interest rate constant to calibrate the borrow rate for each individual pair. Within the same interest rate gradient per market, each pair is applied with a different constant to have distinct borrow rates.
Still, despite having a pair-specific constant to align the risk-return profile of each pair, the model still lacks sensitivity of pair-specific ‘**demand.'**
If one pair’s borrow demand increases, the global utilization—and thus the borrow rate for all pairs within the same unified pool—rises accordingly. Ideally, if one pair’s borrow demand increases, that pair’s pair-specific rates experience a shift, while the other pair’s rate stays the same with a slight increase as the global utilization increases.
Our solution is adding pair-specific sensitivity on top of a global utilization-based interest rate model.
## Gauging Pair-Specific Demand via Buffer Allocation
Among the two types of caps(Hard and Soft) mentioned on the previous page, [Segmented Risk Exposure](docs/architecture/segmented-risk-exposure), Hard Cap represents the maximum borrow limit of that pair; once the Hard Cap is tapped, no more borrowing is permitted.
On the other hand, Soft cap is not a hard restriction on borrowing capacity but rather a gauge of the demand specific to each pair. Pairs not only have their own interest rate curve but are also dynamic in reacting to the demand specific to each pair.
Once the borrowing demand of the pair touches the predetermined Soft Cap, this indicates heightened borrow demand. And so the pair-specific constant shifts upwards.
Increase in pair-specific constant will solely be applied to pairs that have surpassed their Soft Cap and, therefore, will not affect the borrow rate of other pairs. Heightened rates will effectively reflect the demand specific to that pair while leaving other pairs to stay at their own constant and base interest rate.
### Example
Consider \[*aUSDC*]USDC market exposed to Collateral A and B within the same unified pool, both with a defined Soft Cap.
1. **Increased borrow demand of Collateral A**
With more arbitrageurs now borrowing against Collateral A, the Soft Cap of Collateral A has been surpassed.
2. **Collateral A under Buffer Allocation**
Reserved Buffer is allocated to Collateral A, and arbitrageurs pay Buffer Premium on top of Base Rate(Aave Rate + 246 Rate) to further borrow with Collateral A.
3. **Rate of Collateral B**
Meanwhile, the rate of Collateral B remains mostly unaffected, as Collateral B has not reached its Soft cap.
# Liquidation
Source: https://docs.246club.xyz/docs/architecture/liquidation
Liquidation mechanics and protections across Aave and 246 Club positions.
A static liquidation model struggles to address the many ways market conditions, asset profiles, and user behaviors can vary. By contrast, our dynamic mechanism adjusts parameters based on actual risk levels, ensuring that liquidations stay efficient and protective across a wide spectrum of scenarios.
### Understanding Parameters
There are four essential parameters to consider for asset-specific risk control during liquidation:
* **Max Loan-to-Value Ratio (Max LTV):** The maximum percentage of collateral value that arbitrageurs ( borrowers ) can access. For example, if your collateral is worth $100 and the Max LTV is 70%, you can borrow up to $70. It’s the starting point for how much leverage you can take.
* **Liquidation Threshold (LT):** The LTV level—between the Max LTV and 100%—at which liquidation is triggered.
* **Close Factor (CF):** The percentage of debt that must be repaid during liquidation when the LTV reaches or exceeds the LT.
* **Liquidation Bonus (LB):** The percentage of the collateral’s value that is awarded to the liquidator during liquidation when the LTV is at or above the LT.
## Dual Liquidation Thresholds
Unlike traditional liquidation approaches with a single trigger, we define two separate Liquidation Thresholds:
* **LT1 (Lower Threshold):**
An earlier alert level. When your LTV crosses LT1, the liquidation process can start, but the risk is still considered moderate.
* **LT2 (Higher Threshold):**
A more critical point is nearer 100%. If your LTV reaches or exceeds LT2, the situation is viewed as higher risk, prompting stronger corrective measures.
Within this LT1 ↔ LT2 zone, two key parameters change gradually rather than jumping abruptly:
1. **Close Factor (CF):**
CF can **increase or stay constant** from its LT1 value to its LT2 value. Near LT1, a smaller portion of your outstanding debt might be repaid (e.g., 20%), whereas nearer LT2, that portion could scale higher (e.g., 100%).
1. **Liquidation Bonus (LB):**
LB **increase or stay constant** from its LT1 value to its LT2 value.
## Position Closure vs Actual Loss
Liquidation amount, or close factor doesn’t always equate to a large loss. The real cost to the arbitrageur mostly depends on the Liquidation Bonus, not the portion of debt repaid:
* **Liquidation Process:**
A liquidator repays part of your debt (as determined by CF) and receives some of your collateral (tied to LB).
* **Arbitrageur’s Actual Loss:**
The main out-of-pocket loss corresponds to whatever portion of collateral is taken to cover the LB. Even if CF is high, a more moderate LB may limit the overall collateral taken.
### **Example**
* Collateral: \$100
* Debt: \$90
* LT1 → LT2: 90% → 98%
* CF at LT1: 20%
* LB at LT1: 10%
As your LTV touches LT1, 90%, Liquidation begins. With a CF of 20% at LT1, $90 x 20% = $18 will be liquidated. While $18 of your position is closed, your net loss is $18 x 10% = \$1.8—the LB amount.
# Market Structure
Source: https://docs.246club.xyz/docs/architecture/market-structure
## 246 Market `[Re-Lending Asset] Delegation Asset`
In 246 Club, each market follows the format `[Re-Lending Asset] Delegation Asset`.
If you need a refresher on **Re-Lending** or **Credit Delegation**, check out the [Re-Lending section](../re-lend-supply/re-lend) first.
**Re-Lending Asset:** An aToken from Aave (e.g., **aUSDC**) that represents a lending position in Aave. Suppliers (re-lenders) deposit this asset into a market.
**Delegation Asset:** The token Re-Lending Asset is delegating the borrowing power for borrowers to borrow (e.g., **USDC**).
## Market Configuration
**Re-Lending \<> Delegation asset**
* A market usually pairs an aToken (Re-Lending Asset) with its underlying token as the Delegation Asset (e.g., `[aUSDC]USDC`) or with a highly correlated token (e.g., `[aUSDC]GHO`).
**Only one Delegation Asset per market, can have multiple Re-Lending assets per market**
* A single Delegation Asset can pair with multiple Re-Lending Assets in one market.
* For example, a market could be `[aUSDC, aUSDT]GHO` market, letting re-lenders deposit aUSDC and aUSDT and delegate GHO borrowing power.
* However, you can’t have a market with multiple Delegation Assets.
* For instance, `[aUSDC]GHO,USDC` isn’t allowed.
**Collateral listings**
* Each market can have multiple approved collaterals. This approach reduces fragmented liquidity: a single market supports various collateral types.
* Collateral eligibility is market-specific. Just because an asset is listed as collateral in one market doesn’t guarantee it’s listed in another.
* Early on, we focus on collaterals closely correlated to the Delegation Asset. Later, we’ll expand to more varied pairs (e.g., using ETH vault positions as collateral to borrow stablecoins).
* Example:
* A **Morpho USDC** Vault position appear as collateral in `[aUSDC]GHO` market.
* A **Morpho wETH** Vault position appear as collateral in `[aWETH]WETH` market.
> Pair based layout within our UI can be contrasting to the explanation above, but the above is how our markets are structured, it is just broken down into pairs for straightforward comparison of different conditions and parameters of pairs due to our pair specific interest rate model and risk management.
## Utilization
The utilization ratio in a re-lending market tells us how much of the delegated borrowing power is being used. It’s calculated as:
`Utilization Ratio = Borrowing Power Used / Total Delegated Borrowing Power`
Let’s take the `[aUSDC]USDC` market as an example. Suppose a re-lender deposits 100 USDC on Aave, which becomes 100 aUSDC (Aave’s token for deposited USDC). From this, they delegate borrowing power worth 80 USDC to borrowers. If borrowers use 72 USDC of that borrowing power, the utilization ratio is:
`72 USDC (borrowed) / 80 USDC (delegated borrowing power) = 90%`
This 90% utilization ratio means that 90% of the available borrowing power in the `[aUSDC]USDC` market is in use. The remaining 10% is what we call the underutilized portion, which plays a key role in managing liquidity and withdrawals.
## Risk Management
We strive for efficient capital usage via a semi-unified pool structure. However, each market and pair also enforces its own risk controls:
#### Interest Rate Model
* Within a given market, all delegated borrowing power and collaterals share a global utilization.
* The base interest rate hinges on that utilization, then adjusts for pair-specific factors.
* See our detailed [Interest Rates](docs/architecture/interest-rate-model) doc for more on how each market’s rate curve is set.
#### Risk Parameters
* Loan-to-Value (LTV) ratios, Liquidation Thresholds, and other parameters can vary by combination of a pair.
* The same collateral may have a different LTV in different markets, depending on the Delegation Asset.
# Segmented Risk Exposure
Source: https://docs.246club.xyz/docs/architecture/segmented-risk-exposure
How risk is compartmentalized across assets and protocols in 246 Club.
## Why Segmented Risk Exposure?
### The Isolated vs. Unified Dilemma
* **Unified Pools**
* *Upside*: A single large reservoir where depositors earn yield from the entire market. Borrowers freely access liquidity with minimal friction.
* *Downside*: All participants are tied to every collateral’s performance; a risky or highly demanded collateral can dominate the entire pool.
* **Isolated (Pair-Based) Pools**
* *Upside*: Lenders and borrowers know precisely which collateral(s) they’re exposed to. Each market stands on its own, preventing risk contagion.
* *Downside*: Liquidity becomes scattered across many small pools. This fragmentation can lead to inefficient interest rates, as each isolated pool juggles supply and demand on its own.
**Segmented Risk Exposure** (SRE) is our solution, merging the convenience and depth of unified liquidity with the targeted control of isolated markets.
## How SRE Works
### One Large Pool, Multiple Segments
Under SRE, **all capital** (supplied by re-lenders) resides in a **single pool**—no need to split up your deposits across multiple mini-markets. However, this big pool is internally divided into “segments,” each allocated to a specific collateral.
1. **Segment Caps**
Each collateral gets a maximum borrowing limit within the overall pool. Once a collateral hits its cap, borrowing capacity for that collateral is effectively “paused,” protecting the rest of the pool from unlimited exposure.
2. **Collateral-Specific Settings**
We can fine-tune how aggressively or conservatively each collateral can draw from the pool. Some collaterals have **strict caps** (a hard limit), while others use **soft caps** (a limit that can dynamically adjust under certain conditions).
3. **On-Demand Liquidity**
As long as a collateral hasn’t reached its limit, borrowers tap into a common liquidity source. This is more flexible than purely isolated markets and typically allows for more stable borrowing and lending rates (see the [Interest Rate Model](docs/architecture/interest-rate-model) for how rates are calculated).
### Example Scenario
1. You deposit aUSDC into \[aUSDC]USDC market. All borrowing power delegated to this market shares liquidity.
2. Collateral A listed in this market can borrow up to, say, 30% of the pool’s total capacity, while Collateral B might have a separate 20% allocation.
3. If Collateral A’s demand is sky-high and it nears its 10% cap, further borrowing for A gradually tightens or halts—without impacting B’s share, which remains open as long as B’s own segment has capacity.
## Benefits and Implications of SRE
**(A) Reduced Fragmentation, Preserved Liquidity**
With SRE, lenders don’t have to manually chase yields across dozens of isolated pools. They deposit once into **one** reservoir. Borrowers still benefit from a larger overall liquidity base, meaning fewer “empty” or underutilized markets.
**(B) Targeted Risk Control**
By capping each collateral’s draw, we **limit** how much it can influence the pool. If a new or potentially volatile collateral sees a surge in borrowing demand, it can’t swallow the entire supply. That effectively shields lenders from unlimited exposure to any single risk factor.
**(C) Flexibility with Caps**
Soft caps let us react to real-world conditions:
* If a collateral proves safe and popular, we can raise its cap.
* If it starts to show signs of excessive volatility, we keep its cap low or revert to a hard cap.
Because SRE enforces these caps within one pool, we don’t need to start a separate pool every time we want to add or adjust a collateral.
**(D) Trade-Offs to Consider**
* **Cap Overshoot**: If a cap is set too low, demand goes unmet even if the larger pool has free liquidity.
* **Governance Updates**: SRE requires active monitoring. Caps may need tweaking as market conditions shift.
* **Not as Isolated as Pure Silo**: Although SRE segments risk, it’s not a complete silo model—collaterals still share an overarching pool.
***
## Soft Caps
While some collaterals might have a **hard cap**, some use **soft caps** for more adaptable control. Once a collateral’s usage nears its soft cap, borrowing conditions (including potential interest rate adjustments) can change to moderate further growth. This helps maintain stability without completely shutting off borrowing. For full details on how soft caps tie into rate changes, check out the next page.
# Cross-Protocol Arbitrage
Source: https://docs.246club.xyz/docs/cross-protocol-arbitrage/cross-protocol-arbitrage
Capture interest rate arbitrage opportunities with leverage
> Opening a leveraged Cross-Protocol Arbitrage position on 246 Club is **similar** to leveraged looping from protocols like Morpho or Aave :
>
> * You leverage a single yield source as a collateral with a single borrow asset, up to the protocol’s maximum Loan-to-Value (LTV) ratio.
> * There’s no fixed repayment schedule. You repay whenever you choose, as long as your position stays below its liquidation threshold.
> * If your collateral’s value drops or your debt grows such that your LTV exceeds the Liquidation Threshold, your collateral may be liquidated to cover the loan.
## Understanding Cross-Protocol Arbitrage
Cross-Protocol Arbitrage allows users to **leverage interest rate arbitrage opportunities** by collateralizing yield position from one protocol and borrowing against it on another, **thereby capturing interest rate spreads with leverage**.
For example, if a **Morpho Vault on USDC is yielding 10%** while the **Aave borrow rate is 5%**, a user can capture the spread through cross-protocol arbitrage. By leveraging this position 10x, the user could earn an approximate net leveraged APY of 50% ((10% – 5%) × 10).
In this setup, the **Morpho Vault serves as collateral to borrow from Aave via 246 Club**, further amplified using flash leverage (executed through flashloans, allowing instant leveraged entry without upfront capital) similar to a standard leverage-looping strategy.
## **What’s Different?**
**Collateral - Borrow Separation**
In traditional lending markets, once you provide collateral or supply assets to a protocol, you can only borrow against them within that same protocol. At 246 Club, however, **your collateral is deposited into a yield source** (such as a Morpho vault) to generate returns, **while your leveraged borrowings come from Aave** through delegated borrowing power provided by re-lenders. (Learn more about [Re-Lending](https://docs.246club.xyz/re-lend-supply/quickstart#understanding-lending-restaking) and [Credit Delegation](https://docs.246club.xyz/re-lend-supply/quickstart#id-2-credit-delegation).)
**Unified Market Structure & Pair Specific Risk Controls**
While 246 Club presents multiple “pairs” of collateral and borrowable assets in the interface, **liquidity isn’t siloed on a per-pair basis**. We adopt a structure similar to Compound V3, where each market offers a specific borrowable token supported by multiple collaterals. (See details on [market structure](../architecture/market-structure).)
## Key Terms
### Net APY
When you borrow, your **Net APY** is influenced by both the yield on your collateral and the interest you pay on your loan. We can think of it as:
`Net APY = (Collateral’s Supply APY) – (Borrow APY × LTV)`
**Collateral APY**
This is the yield you earn on whatever protocol your collateral is deposited in. For instance, if you deposit collateral into a Morpho USDC vault, you’ll earn that vault’s APY (plus any associated incentives).
**Borrow APY**
* This is the interest rate you pay for borrowing your chosen asset. It combines **Aave’s interest rate** with an **extra premium** charged by 246 Club.
* Because rates on Aave and 246 Club can change based on supply and demand, your effective Borrow APY can fluctuate over time. For details on how 246 Club sets these rates, see our [Interest Rate Model](../architecture/interest-rate-model).
### LTV, LT
Each **Collateral–Borrow Pair** has a specific maximum LTV (the loan amount you can take relative to your collateral’s value) and a **Liquidation Threshold**. If your LTV surpasses the Liquidation Threshold, your position is at risk of liquidation.
1. **Max LTV**
* The upper bound on how much you can borrow against your collateral.
2. **Liquidation Threshold (LT)**
* If your LTV reaches this level, liquidation can be triggered.
3. **Close Factor (CF)**
* Defines how much of your position is liquidated once you cross the threshold. (See our [Liquidation Mechanics](../architecture/liquidation) for more.)
# Managing Arbitrage Position
Source: https://docs.246club.xyz/docs/cross-protocol-arbitrage/managing-arbitrage-position
Keep your cross-protocol arbitrage position healthy by monitoring LTV and health factor.
**Similar to managing a leverage loop or loan position in other lending protocols, managing a CPA position in 246 Club primarily revolves around safeguarding it from liquidation.**
Two essential concepts guide this process:
* **Loan-to-Value (LTV) Ratio**: This represents the percentage of your loan relative to your collateral. For example, borrowing 80 USDC against 100 aUSDC results in an 80% LTV.
* **Liquidation Threshold (LT)**: This is the threshold your LTV must remain below to prevent liquidation, such as 90%.
Your objective is to ensure your LTV stays below the LT at all times. Should your LTV approach the LT, your position becomes at risk of liquidation.
Certain conditions may cause your LTV to rise closer to the LT, thereby increasing liquidation risk:
* A decline in the value of your collateral.
* An increase in debt value due to interest accumulation.
These risks are examined in greater detail below.
To understand the consequences of liquidation and **learn how 246 Club’s liquidation process works to minimize loss**, review our [liquidation](../architecture/liquidation) section for a comprehensive overview.
## Morpho / Euler Earn Vault Bad Debt
> Risks specific to other collateralized positions will be added once additional protocols integrate on the yield side.
* In vaults based on Morpho v1.0, bad debt can arise. This lies beyond 246 Club’s direct control, but it may affect borrowers.
* These v1.0 positions lack secondary liquidity and external price checks. Value depends on each vault’s exchange ratio (reflecting an individual’s share) and the underlying asset. If bad debt occurs, it is socialized within the vault, immediately realized, and reduces the exchange ratio. A lower ratio drops the share price, which could trigger liquidation if the value dips below your liquidation threshold.
* While this risk stems from vault v1.0 mechanics rather than 246 Club, leveraging via 246 Club can amplify potential losses in such circumstances. This is inherent in leveraged strategies, and we strive to equip you with clear information and tools to help manage exposure.
## Yield Bearing Stablecoin Depegging
If the yield source is not a direct deposit into a yield pool but instead a tokenized yield receipt, its value may deviate from the baseline of its underlying denomination (e.g., ETH for LSTs/LRTs, or USD for most yield-bearing assets). Such deviations reduce the value of the collateralized yield position, which can increase the LTV and bring it closer to the liquidation threshold.
## Negative Net APY
When your borrow rate remains higher than the Morpho Vault yield for an extended period, the debt may grow faster than the collateral value. Over time, this can bring you closer to liquidation.
## When the Underlying Collateral Asset and Borrowed Asset Are Identical
*(e.g., Morpho USDC Vault as collateral and USDC as the borrowed asset)*
* With the same asset (USDC) on both sides, price volatility won’t trigger liquidation.
* This protection remains valid even if USDC depegs from its usual value.
* However, the vault’s bad debt risk still applies.
* Also, if the borrow rate outpaces the vault’s yield for too long, the increasing debt can push the position nearer to liquidation.
## When the Underlying Collateral Asset and Borrowed Asset Are Correlated
*(e.g., Morpho USDC Vault as collateral and GHO as the borrowed asset)*
* Liquidation is possible if the collateral (USDC) breaks its peg or if the borrowed asset (GHO) overshoots its peg.
* Bad debt in the vault remains a factor.
* Similarly, if the borrow rate exceeds the collateral’s yield for an extended stretch, you risk liquidation as debt grows faster than collateral value.
## When the Underlying Collateral Asset and Borrowed Asset Are Unrelated
*(e.g., Morpho ETH Vault as collateral and GHO as the borrowed asset)*
* If ETH’s price drops below a certain level or GHO’s value climbs disproportionately, liquidation risk arises.
* Bad debt within the vault still applies.
* As with other scenarios, prolonged borrowing costs that surpass the collateral’s yield can gradually push your position closer to liquidation.
# Cross-Protocol Arbitrage UI Guide
Source: https://docs.246club.xyz/docs/cross-protocol-arbitrage/ui-guide
How to open and manage a cross-protocol arbitrage using the 246 Club UI.
Screenshots in this guide reflect a previous version of the UI. We’ll update them soon. The core flows and concepts remain the same.
In 246Club, each market is defined by a **single borrowable asset** and **multiple eligible collaterals**. However, since borrowing positions are opened per **pair** (one collateral + one borrow asset), the UI is structured around these **pair-specific combinations**.
Each pair has its own risk parameters—such as **Loan-to-Value (LTV)** and **Liquidation Threshold (LT)**—as well as a unique **interest rate model**. [Learn more about pair-specific parameters](docs/architecture/market-structure#risk-management)
We hope the UI feels straightforward, but if there's anything unclear, the table of contents can guide you to the exact section you need.
> #### Table of contents
>
> 1. [Collateral Section](#collateral-section)
> 1. [Collateral Column](#collateral-column)
> 2. [( Collateral ) Balance Column](#collateral-balance-column)
> 3. [( Collateral ) APY Column](#collateral-apy-column)
> 2. [Borrow Section](#borrow-section)
> 1. [Borrow / APY / Liquidity / LTV Column](#borrow-apy-liquidity-ltv)
> 2. [Net APY Column](#net-apy-column)
> 3. [Borrow Modal](#borrow-modal)
> 4. [Borrow Modal - Leverage](#borrow-modal-leverage)
> 5. [Managing My Position](#managing-my-position)
> 1. [Supply ( Collateral ) Modal](#supply-collateral-modal)
> 2. [Withdraw ( Collateral ) Modal](#withdraw-collateral-modal)
> 3. [Borrow Modal](#borrow-modal-1)
> 4. [Repay Modal](#repay-modal)
> 5. [Repay Modal - Flash Repay](#repay-modal-flash-repay)
## Borrow Dashboard
The Borrow Table lists all available pairs you can borrow from.
Each row represents a **unique pair**, with relevant details about the collateral side and borrow side.
## Collateral Section
#### Collateral Column
Each row begins with the **collateral** you can use for borrowing.
You can see
* **Vault Position** (e.g., a Morpho lending position like Smokehouse USDC)
* and the **underlying asset** (e.g., USDC or ETH), which you can zap into a vault position directly from the UI.
If you don’t already hold the vault position, the protocol will:
1. Deposit your underlying asset into the respective Morpho vault.
2. Mint the vault receipt token.
3. Use that receipt as collateral—automatically.
This means even without a pre-existing Morpho position, you can open a position within our UI.
> End result is the same: whether using a vault you already hold or zapping in from an underlying asset, the position becomes your collateral.
#### ( Collateral ) Balance Column
Hovering over the **Balance** column shows:
* Your balance of the **vault receipt token** (e.g., Smokehouse USDC)
* Your balance of the **underlying asset** (e.g., USDC)
* **Total combined amount** available for collateral use
#### ( Collateral ) APY Column
Hovering over the **APY** column reveals a full breakdown of returns from the collateral :
* **Native APY**: Base yield from the Vault used as collateral ( e.g. Lending yield from Morpho )
* **Reward APY**: Additional rewards (e.g., \$MORPHO incentives)
* **Points**: Points earned from the vault (e.g., Resolv points)
* **Combined APY**: Total of all the above
## Borrow Section
#### Borrow / APY / Liquidity / LTV
* **Borrow Column**: Asset you can borrow
* **APY Column**: The interest rate you’ll pay. This includes Aave’s base rate and an additional 246Club-specific rate. [More on the rate model](docs/architecture/interest-rate-model)
* **Available Liquidity**: Maximum borrowable amount left for this pair
* **LTV**: Maximum borrow ratio you can take. Below that, the **Liquidation Threshold (LT)** is displayed. [Learn how to manage LTV and LT](docs/cross-protocol-arbitrage/managing-arbitrage-position)
#### Net APY Column
This column shows the **net return** on your loan position:
**Net APY** = (Collateral APY) – (Borrow APY × LTV)
This accounts for how much you're earning from your collateral minus how much you’re paying in borrow interest—weighted by the maximum borrowable amount.
Hovering over the Net **APY** column reveals a breakdown of:
* **Collateral APY**: The base supply rate you earn from supplying the asset to Morpho vaults.
* **Reward APY**: The additional reward you earn from Morpho by supplying to that vault(e.g., \$MORPHO)
* **Points**: The points multiplier you get from the Vault by supplying(e.g., Resolv points)
* **Borrow APY**: The apy displayed from APY column of delegation asset.
* **Net APY**
## Borrow Modal
Clicking the Borrow button opens a modal with three sections: Collateral, Borrow, and Summary.
#### 1. Collateral Box
* Shows the selected **collateral** and allows you to input how much to deposit.
* You can enable **"Allow USDC"** to use USDC (or other underlying assets) directly to zap into the vault.
* Clicking **Max** fills in your maximum depositable amount, depending on whether the underlying asset is enabled.
#### 2. Borrow Section
* Shows the selected **borrow asset** and allows you to input how much to borrow.
* You can borrow up to:
**Collateral Value × Max LTV**
* Clicking **Max** auto-fills the maximum borrowable amount.
#### 3. Summary Section
Displays a real-time summary based on the input amount of collateral and borrow :
* Total **Collateral Supplied**
* Total **Amount Borrowed**
* Current **LTV**
* Final **Net APY**
## Borrow Modal - Leverage
Leverage mode automates the borrowing and collateral depositing process based on your chosen leverage ratio.
The modal has three sections: **Position**, **Leverage**, and **Summary**.
#### 1. Position Box
* Shows the selected **collateral** and **borrow asset pair**.
* You can enable **"Allow USDC"** to use USDC (or the underlying asset) to zap directly into the vault.
* Clicking **Max** fills in your maximum depositable amount.
> In leverage mode, you only input how much collateral (or underlying asset) you want to deposit.
>
> The borrow amount is calculated automatically based on your selected leverage ratio.
For example, if you deposit $100 and set leverage to 10×, the system borrows $900 and adds it to your collateral to reach a \$1,000 position.
* **Net APY** is shown at the top-right of the box, reflecting your yield without leverage.
#### 2. Leverage Box
* Set your desired **Leverage Ratio** using the slider.
* The maximum ratio is determined by the selected pair’s **Max LTV**, calculated as:
`1 / (1 - LTV)`
For example, with 90% LTV: `1 / (1 - 0.9) = 10× max leverage`.
* As you increase the ratio, the **LTV** of the position rises.
The current LTV is shown in the top-right of the box.
> You cannot exceed Max LTV, but you should still size your leverage based on your own risk preference.
#### 3. Summary Section
* **ROE** is shown first — this is your Net APY multiplied by the Leverage Ratio.
* Real-time updates reflect changes to inputs and leverage settings:
* **Net APY**
* Total **Collateral Supplied** (including borrowed and re-added amounts)
* Total **Amount Borrowed**
* Current **LTV** after leverage is applied
## My Position
After a successful transaction, you're redirected to the **My Position** page.
Here, you’ll see:
* The collateral and borrow assets in each position
* Your current **Net APY**
* Your real-time **LTV**
> The LTV bar changes color based on risk:
>
> * Green: Safe
> * Orange: Moderate risk
> * Red: Close to liquidation
[Learn more about managing loan positions](docs/cross-protocol-arbitrage/managing-arbitrage-position)
## Managing My Position
You can manage your position through four actions:
* **Supply**: Add more collateral
* **Withdraw**: Remove part of your collateral
* **Borrow**: Borrow additional funds
* **Repay**: Reduce your borrowed amount
Each opens a corresponding modal.
#### Supply ( Collateral ) Modal
Add more to your collateral. Max depositable amount includes both in your wallet :
* Existing vault position
* Underlying asset (if enabled)
Entering an amount shows updated:
* Collateral total
* LTV
* Net APY
#### Withdraw ( Collateral ) Modal
The **Withdraw** modal allows you to withdraw part of your collateral from an existing loan position.
The **Max** button shows the maximum amount you can withdraw *without exceeding the Max LTV*. This is dynamically calculated based on your current borrow amount and the remaining headroom before reaching the liquidation threshold.
As you input the amount, the **Summary** section updates:
* New **Collateral Value**
* New **LTV**
* Updated **Net APY**
#### **Borrow Modal**
The **Borrow** modal lets you increase the borrowed amount against your existing collateral position.
* The input field allows you to specify how much more of the borrow asset you’d like to take out.
* The **Max** button auto-fills the maximum additional amount you can borrow, calculated as:
**(Collateral Value × Max LTV) – Current Borrow Amount**
The UI ensures that the total LTV after borrowing doesn’t exceed the pair’s maximum allowed LTV.
As you adjust the borrow amount, the **Summary** updates :
* New **Borrowed Amount**
* New **LTV**
* Updated **Net APY**
#### **Repay Modal**
The **Repay** modal allows you to pay down your outstanding debt.
* You can input how much you’d like to repay.
* The **Max** button shows the lesser of:
* The full borrowed amount of your position
* The amount of borrow asset (e.g., USDC) available in your wallet
You can repay partially or in full, and doing so lowers your LTV, improving the safety of your position.
As you type in the repay amount, the **Summary** recalculates:
* Remaining **Borrow Amount**
* New **LTV**
* Adjusted **Net APY**
#### **Repay Modal - Flash Repay**
Flash-Repay mode automates the repayment process using your collateral — allowing you to pay down your outstanding debt without needing funds in your wallet.
Flash-Repay is useful if you want to improve your position health or fully close your position without external capital.
The modal has three sections: **Position**, **Adjust LTV**, and **Summary**.
**1. Position Box**
* Shows the selected **collateral** and **borrow asset pair**.
* Before any interaction, it displays the current **Collateral Supplied** and **Amount Borrowed**, along with the dollar value of each.
* After setting a target LTV using the Adjust LTV Box, the "After Repay" values are displayed, showing updated Collateral and Borrow amounts.
> In Flash-Repay mode, you don't manually input an amount.
>
> You simply set a target LTV, and the system automatically calculates the required collateral withdrawal and debt repayment.
**2. Adjust LTV Box**
* Set your desired **Target LTV** using the slider — can only be set lower than your current LTV.
* Clicking **Max** sets your Target LTV to 0%, fully repaying your debt.
**3. Summary Section**
* Real-time updates reflect changes based on your selected Target LTV:
* **Net APY**
* Total **Collateral Supplied** (after accounting for the amount used to repay)
* Total **Amount Borrowed**
* Current **LTV** after Flash-Repay
# 246 Club Exit Guide
Source: https://docs.246club.xyz/docs/etherscan-withdrawal-guide
Withdraw 246 Club positions directly onchain with the complete block explorer walkthrough.
246Club is sunsetting. This guide walks you through withdrawing your positions directly on-chain using Etherscan, Sonicscan, or your chain's block explorer.
**Diamond246 Contract:** `0x2460a05cC7C9e0f1e20B9b98C6F54aCaad221b98` (same address on all chains)
> The contract is verified on all chains. Since it uses the **Diamond proxy pattern (EIP-2535)**, you'll interact with it through the special "Diamond Proxy" tab on the block explorer.
***
## Block Explorer Links
| Chain | Diamond246 Link |
| -------- | ------------------------------------------------------------------------------------------------------ |
| Ethereum | [View on Etherscan](https://etherscan.io/address/0x2460a05cC7C9e0f1e20B9b98C6F54aCaad221b98) |
| Sonic | [View on Sonicscan](https://sonicscan.org/address/0x2460a05cC7C9e0f1e20B9b98C6F54aCaad221b98) |
| Plasma | [View on Plasmascan](https://testnet.plasmascan.io/address/0x2460a05cC7C9e0f1e20B9b98C6F54aCaad221b98) |
***
## Navigating the Diamond Proxy on Etherscan
Diamond proxy contracts have a special **"Diamond Proxy"** button on the block explorer. This is different from the regular "Read/Write as Proxy" tabs.
### How to access Diamond Proxy functions
1. Go to the Diamond246 contract page
2. Click the **"Contract"** tab
3. You'll see several sub-tabs — find the **"Diamond Proxy"** button (highlighted in blue)
4. Click it to reveal a dropdown with **Read** and **Write**
*The "Diamond Proxy" dropdown showing Read and Write options:*
### Reading data (Diamond Proxy > Read)
1. Click **"Diamond Proxy"** > **"Read"**
2. On the left sidebar, you'll see a list of all facets (numbered). Click **ViewerFacet** for `positions`, `restakers`, `pairs`, and other read functions
3. The right side shows all functions in that facet
*Diamond Proxy Read view — ViewerFacet selected in the left sidebar, showing functions like `positions` and `pairs`:*
### Writing transactions (Diamond Proxy > Write)
1. Click **"Diamond Proxy"** > **"Write"**
2. Click **"Connect to Web3"** to connect your wallet
3. On the left sidebar, select the correct facet:
| Action | Facet to select |
| ------------------- | ----------------------------- |
| Unstake | **RestakingFacet** |
| Repay | **BorrowingFacet** |
| Withdraw Collateral | **CollateralManagementFacet** |
*Diamond Proxy Write view — RestakingFacet selected in sidebar, showing `unstake` function with input fields:*
> **Tip:** If you don't see the function you need, you're on the wrong facet in the sidebar. Check the table above and click the correct facet name.
***
## 1. Find Your Pair ID
Every operation requires a **delegationPairId** (for restake positions) or **pairId** (for borrow positions). Find yours from the tables below.
### Ethereum — Restake Pools
| Asset (aToken) | Underlying | Debt | delegationPairId |
| -------------- | ---------- | ---- | -------------------------------------------------------------------- |
| aEthUSDC | USDC | GHO | `0x858e80a896e0b166bb915cf23a5422af84da3bd03ba15266bf657e202a706709` |
| aEthUSDC | USDC | USDC | `0x6f8227c2f15c13d9c9d409c165322ea1fa7815b464a83bb3db97196f6b547acf` |
| aEthWETH | WETH | WETH | `0xc95ddaa41f8b052609186ef95d959eeed8e9442460735d56ccc5f2fb9c8c6459` |
### Ethereum — Borrow Pairs
| Collateral | Debt | pairId |
| ---------- | ---- | -------------------------------------------------------------------- |
| hyperUSDC | GHO | `0xc63f980a8c707b1fa3bd5d224ebb1e39461f918075af70e877e650cf165bcdd0` |
| hyperUSDC | USDC | `0x138691662b8b1b8ab563fe6dc02886254c7042e59b92da0c4e39b0a9a0676031` |
| fUSDC | GHO | `0x298aa6a6ed3c11386efa88a86ddd1aab2f5538ef87265e78ca04203d235da369` |
| fUSDC | USDC | `0x75af9116d0ec9cb02b0b105eaf57be84e3881668cf2cd2061652e5ad35100035` |
| bbqUSDC | GHO | `0x24263bb59f68725cc3009fbe60ef2defd3ef2115f90ea177ac8a988a034e77df` |
| bbqUSDC | USDC | `0x784ef0cb8b003a2560dc075d1aa0ad1f2b77c7fb25592ba49e307c1b5f24a32d` |
| resolvUSDC | GHO | `0x59b976403b0f22232c3c51de092212bb1c8f19deae389c245dd64209ad8bb693` |
| resolvUSDC | USDC | `0xdb9e632142599e0944d6abbd2f12403978125767a6ebaa11c76c5d6deac8b094` |
| USUALUSDC+ | GHO | `0x01c0ae13c65f5acd29a9b2965839d60a64db3ddf5021166eeefbdcd47790eb4c` |
| USUALUSDC+ | USDC | `0x7ea859e1663ec352f486242a1a6d3b3e49a7f0adbebd3db91c165c3ae9ceeb48` |
| Re7WETH | WETH | `0x4d0d8032c93ce906c251320ddfc684ab1f21d72dfecac3b7895d12aa7927a5cf` |
| mhyETH | WETH | `0x6a2ac2068deeddb301734d68d860d22d7c6d52d082c69385346cabc310bb8ff8` |
| gtLRTcore | WETH | `0x27b55ecdf7c08e7334dedd57b2d003f1632f659e985257c0e55f878afb50bca7` |
### Sonic — Restake Pools
| Asset (aToken) | Underlying | Debt | delegationPairId |
| -------------- | ---------- | ------ | -------------------------------------------------------------------- |
| aSonUSDC | USDC.e | USDC.e | `0x4372989400a74c4ee7194806b73722505de0f06b22d6b210e022b5fac29eb641` |
### Sonic — Borrow Pairs
| Collateral | Debt | pairId |
| ---------- | ------ | -------------------------------------------------------------------- |
| wstkscUSD | USDC.e | `0xeb88af7ca2a4b64c65951fd2fa1b6c0ea571ff03de0da61edd4ef1c2421573ba` |
### Plasma — Restake Pools
| Asset (aToken) | Underlying | Debt | delegationPairId |
| -------------- | ---------- | ----- | -------------------------------------------------------------------- |
| aPlaUSDT0 | USDT0 | USDT0 | `0x060ffdf07a3de1f85184e3996ffd480d811e95ea141404370b48f81d154f91bd` |
### Plasma — Borrow Pairs
| Collateral | Debt | pairId |
| ------------ | ----- | -------------------------------------------------------------------- |
| 246USDT0 | USDT0 | `0x7830cec2536e7ccb563a576b0b0837a87e7d245bd40583d247697c272f1d1dc3` |
| Re7USDT0Core | USDT0 | `0x1562c1aede7b0d4f808fc1078b2b4a638c1202544a34900b7f978130f4a6db30` |
***
## 2. Check Your Positions
1. Go to the Diamond246 contract on the block explorer for your chain
2. Click **"Diamond Proxy"** > **"Read"**
3. In the left sidebar, click **"ViewerFacet"**
*ViewerFacet selected in sidebar — scroll down to find `positions` and `restakers` functions:*
### Check Borrow Position
Find and expand the **`positions`** function.
| Parameter | What to enter |
| --------- | --------------------------------- |
| `pairId` | Your pair ID from the table above |
| `account` | Your wallet address |
Click **Query**. You will see:
| Field | Meaning |
| ------------ | ------------------------------------------------- |
| `account` | Your proxy account address (used internally) |
| `debtShares` | Your share of the debt pool |
| `collateral` | Your collateral amount (in token's smallest unit) |
*Example: querying the hyperUSDC/USDC pair (`0x1386...6031`) for address `0x308c...6baf` — result shows `debtShares`, `scaledDebt`, and `collateral`:*
### Check Restake Position
Find and expand the **`restakers`** function.
| Parameter | What to enter |
| ------------------ | -------------------------------------------- |
| `delegationPairId` | Your delegation pair ID from the table above |
| `account` | Your wallet address |
Click **Query**. You will see:
| Field | Meaning |
| -------------- | ---------------------------------------------- |
| `scaledSupply` | Your restaked amount (scaled — see note below) |
| `interest` | Accrued interest you can claim |
*Example: querying the aEthWETH/WETH restake pool (`0xc95d...6459`) for address `0x08c7...bff5` — result shows `scaledSupply` and `interest`:*
> **Note:** `scaledSupply` is RAY-scaled (divided by 10^27 with the liquidity index). The actual amount is approximately `scaledSupply * liquidityIndex / 10^27`.
***
## 3. Unstake (Withdraw Restaked Assets)
This withdraws your restaked aTokens (e.g. aEthUSDC, aSonUSDC, aPlaUSDT0) from Diamond246.
### Step by Step
1. Go to Diamond246 on the block explorer
2. Click **"Diamond Proxy"** > **"Write"**
3. Click **"Connect to Web3"** and connect your wallet
*The "Connect to Web3" button — make sure it shows green (connected) before proceeding:*
4. In the left sidebar, click **"RestakingFacet"**
5. Find and expand the **`unstake`** function
6. Fill in the parameters:
| Parameter | What to enter |
| -------------------------------- | ------------------------------------------------------------------------------------------------------------------- |
| `delegationPairAssets` > `asset` | The aToken address (see table below) |
| `delegationPairAssets` > `debt` | The debt token address (see table below) |
| `amount` | Use max value for full withdrawal: `115792089237316195423570985008687907853269984665640564039457584007913129639935` |
| `onBehalf` | Your wallet address |
| `receiver` | Your wallet address |
7. Click **Write** and confirm in your wallet
*Example: unstaking from the aEthWETH/WETH pool — RestakingFacet selected, `unstake` expanded with aToken and debt addresses filled, max amount for full withdrawal:*
### Token Addresses for `unstake`
#### Ethereum
| asset (aToken) | Address | debt | Address |
| -------------- | -------------------------------------------- | ---- | -------------------------------------------- |
| aEthUSDC | `0x98c23e9d8f34fefb1b7bd6a91b7ff122f4e16f5c` | GHO | `0x40d16fc0246ad3160ccc09b8d0d3a2cd28ae6c2f` |
| aEthUSDC | `0x98c23e9d8f34fefb1b7bd6a91b7ff122f4e16f5c` | USDC | `0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48` |
| aEthWETH | `0x4d5f47fa6a74757f35c14fd3a6ef8e3c9bc514e8` | WETH | `0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2` |
#### Sonic
| asset (aToken) | Address | debt | Address |
| -------------- | -------------------------------------------- | ------ | -------------------------------------------- |
| aSonUSDC | `0x578ee1ca3a8e1b54554da1bf7c583506c4cd11c6` | USDC.e | `0x29219dd400f2bf60e5a23d13be72b486d4038894` |
#### Plasma
| asset (aToken) | Address | debt | Address |
| -------------- | -------------------------------------------- | ----- | -------------------------------------------- |
| aPlaUSDT0 | `0x5d72a9d9a9510cd8cbdba12ac62593a58930a948` | USDT0 | `0xb8ce59fc3717ada4c02eadf9682a9e934f625ebb` |
### After Unstaking: Withdraw from Aave
After unstaking, you receive the **aToken** (e.g. aEthUSDC, aSonUSDC, aPlaUSDT0). To get the underlying token (e.g. USDC), withdraw via the Aave UI:
**[app.aave.com](https://app.aave.com/)** — Go to Dashboard > find your supplied asset > click **Withdraw** > enter max amount > confirm.
***
## 3.5. Redeem re-aUSDC (Sonic Only)
If you hold **re-aUSDC** on Sonic, you need to redeem it to get back your aSonUSDC (aToken).
**re-aUSDC Contract:** [`0x561d1907dd7C0B92E5278356BC230B7e94704d57`](https://sonicscan.org/address/0x561d1907dd7C0B92E5278356BC230B7e94704d57)
re-aUSDC is an ERC4626 vault. Use `withdraw` to get back an exact amount of aSonUSDC.
### Step by Step
1. Go to the [re-aUSDC contract on Sonicscan](https://sonicscan.org/address/0x561d1907dd7C0B92E5278356BC230B7e94704d57#readContract)
2. Click **"Read Contract"** > find **`maxWithdraw`** > enter your wallet address > click **Query**
3. Copy the returned value — this is the maximum aSonUSDC you can withdraw
4. Switch to the **"Write Contract"** tab > **"Connect to Web3"**
5. Find and expand the **`withdraw`** function
6. Fill in:
| Parameter | What to enter |
| ---------- | ----------------------------------- |
| `assets` | The `maxWithdraw` value from step 3 |
| `receiver` | Your wallet address |
| `owner` | Your wallet address |
7. Click **Write** and confirm
*re-aUSDC contract on Sonicscan — `withdraw` function expanded with assets, receiver, and owner fields:*
After withdrawing, you will receive **aSonUSDC**. Then withdraw from Aave ([app.aave.com](https://app.aave.com/)) to get USDC.e.
***
## 4. Repay Debt
If you have an outstanding borrow position, you must repay the debt before withdrawing collateral.
### How much debt do I owe?
Your debt amount can be calculated from on-chain data:
1. Go to Diamond246 > **"Diamond Proxy"** > **"Read"**
2. Call **`positions`** with your pairId + wallet address — note your **`debtShares`**
3. Call **`pairs`** with the same pairId — note **`totalDebtShares`** and **`totalScaledDebt`**
**Your debt ≈ `(debtShares × totalScaledDebt) / totalDebtShares`**
> **Note:** This gives you an approximate amount in the token's smallest unit (e.g. 6 decimals for USDC, so `100000000` = 100 USDC). The actual debt accrues interest over time, so approve a bit more than this estimate (e.g. add 1%). The `repay` function only transfers the exact amount owed — any excess stays in your wallet.
### Step 1: Approve Diamond246
Before repaying, you need to **approve** Diamond246 to spend your debt token.
> **Tip:** Don't approve max uint256 if you're uncomfortable with unlimited approvals. Instead, approve an amount slightly above your estimated debt. The `repay` function only transfers the exact amount owed — any excess approval is not spent.
1. Go to the **debt token contract** on the block explorer (links below)
2. Click **"Write as Proxy"** (for proxy tokens like USDC) or **"Write Contract"**
3. Click **"Connect to Web3"**
4. Find the **`approve`** function
5. Fill in:
| Parameter | What to enter |
| --------- | ------------------------------------------------------------------------------------------------- |
| `spender` | `0x2460a05cC7C9e0f1e20B9b98C6F54aCaad221b98` (Diamond246) |
| `amount` | Your estimated debt amount with buffer (in token's smallest unit, e.g. for 100 USDC: `100000000`) |
6. Click **Write** and confirm
7. (Optional) After repaying, you can revoke the approval by calling `approve` again with amount `0`
*Example: approving USDC on Etherscan — `approve` expanded with Diamond246 as spender and 100 USDC (100000000) as value:*
#### Debt Token Contracts
| Token | Chain | Address | Explorer Link |
| ------ | -------- | -------------------------------------------- | ------------------------------------------------------------------------------------------------------------ |
| GHO | Ethereum | `0x40d16fc0246ad3160ccc09b8d0d3a2cd28ae6c2f` | [Etherscan](https://etherscan.io/address/0x40d16fc0246ad3160ccc09b8d0d3a2cd28ae6c2f#writeProxyContract) |
| USDC | Ethereum | `0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48` | [Etherscan](https://etherscan.io/address/0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48#writeProxyContract) |
| WETH | Ethereum | `0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2` | [Etherscan](https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2#writeContract) |
| USDC.e | Sonic | `0x29219dd400f2bf60e5a23d13be72b486d4038894` | [Sonicscan](https://sonicscan.org/address/0x29219dd400f2bf60e5a23d13be72b486d4038894#writeContract) |
| USDT0 | Plasma | `0xb8ce59fc3717ada4c02eadf9682a9e934f625ebb` | [Plasmascan](https://testnet.plasmascan.io/address/0xb8ce59fc3717ada4c02eadf9682a9e934f625ebb#writeContract) |
### Step 2: Repay on Diamond246
1. Go to Diamond246 > **"Diamond Proxy"** > **"Write"**
2. In the left sidebar, click **"BorrowingFacet"**
3. Find and expand the **`repay`** function
4. Fill in:
| Parameter | What to enter |
| --------------------------- | --------------------------------------------------------------------------------------------- |
| `pairAssets` > `debt` | Debt token address |
| `pairAssets` > `collateral` | Collateral token address |
| `amount` | `0` (use share for full repay) |
| `share` | Max uint256: `115792089237316195423570985008687907853269984665640564039457584007913129639935` |
| `onBehalf` | Your wallet address |
| `data` | `0x` |
5. Click **Write** and confirm
*Example: repaying on the hyperUSDC/GHO pair — BorrowingFacet selected, `repay` expanded with GHO as debt (`0x40d1...6c2f`), hyperUSDC as collateral (`0x7777...7777`), amount=0 and share=max for full repay:*
#### Collateral Token Addresses
| Token | Chain | Address |
| ------------ | -------- | -------------------------------------------- |
| hyperUSDC | Ethereum | `0x777791c4d6dc2ce140d00d2828a7c93503c67777` |
| fUSDC | Ethereum | `0xb0f05e4de970a1aaf77f8c2f823953a367504ba9` |
| bbqUSDC | Ethereum | `0xbeefff209270748ddd194831b3fa287a5386f5bc` |
| resolvUSDC | Ethereum | `0x132e6c9c33a62d7727cd359b1f51e5b566e485eb` |
| USUALUSDC+ | Ethereum | `0xd63070114470f685b75b74d60eec7c1113d33a3d` |
| Re7WETH | Ethereum | `0x78fc2c2ed1a4cdb5402365934ae5648adad094d0` |
| mhyETH | Ethereum | `0x701907283a57ff77e255c3f1aad790466b8ce4ef` |
| gtLRTcore | Ethereum | `0x4881ef0bf6d2365d3dd6499ccd7532bcdbce0658` |
| wstkscUSD | Sonic | `0x9fb76f7ce5fceaa2c42887ff441d46095e494206` |
| 246USDT0 | Plasma | `0x9c46ee1f01d2b551048f5ff99a4659d98d04bed1` |
| Re7USDT0Core | Plasma | `0xa5eed1615cd883dd6883ca3a385f525e3beb4e79` |
***
## 5. Withdraw Collateral
After repaying all debt, you can withdraw your collateral.
> **Important:** You must repay all debt first. If you have outstanding debt, this transaction will revert.
1. Go to Diamond246 > **"Diamond Proxy"** > **"Write"**
2. In the left sidebar, click **"CollateralManagementFacet"**
3. Find and expand the **`withdrawCollateral`** function
4. Fill in:
| Parameter | What to enter |
| --------------------------- | ------------------------------------------------------------------------------------ |
| `pairAssets` > `debt` | Debt token address (same as repay) |
| `pairAssets` > `collateral` | Collateral token address (same as repay) |
| `amount` | Your **exact** collateral amount from the `positions` query (do NOT use max uint256) |
| `onBehalf` | Your wallet address |
| `receiver` | Your wallet address |
5. Click **Write** and confirm
*Example: withdrawing collateral from the hyperUSDC/GHO pair — CollateralManagementFacet selected, `withdrawCollateral` expanded with GHO as debt, hyperUSDC as collateral, exact collateral amount entered:*
> **Important:** For `amount`, use the exact `collateral` value returned by the `positions` read call in step 2. Do NOT use max uint256 — it will revert.
***
## Quick Reference: Full Exit Flow
### Restakers (no borrow position)
1. **Unstake** on Diamond246 (RestakingFacet) — receive aToken
2. **Withdraw** on [Aave UI](https://app.aave.com/) — receive underlying token (USDC, WETH, etc.)
### re-aUSDC holders (Sonic)
1. **Redeem** re-aUSDC on Sonicscan — receive aSonUSDC
2. **Withdraw** on [Aave UI](https://app.aave.com/) — receive USDC.e
### Borrowers
1. **Approve** debt token for Diamond246
2. **Repay** on Diamond246 (BorrowingFacet) — clear all debt
3. **Withdraw Collateral** on Diamond246 (CollateralManagementFacet) — receive collateral token
### Borrowers + Restakers
1. Approve > Repay > Withdraw Collateral (borrower exit)
2. Unstake > Aave Withdraw (restaker exit)
***
## Need Help?
Join our Telegram group: [https://t.me/+m0QLO9DeQKZjZmQ1](https://t.me/+m0QLO9DeQKZjZmQ1)
# Overview
Source: https://docs.246club.xyz/docs/overview
246 Club : Credit-Yield Conduit
**246 Club** extends credit from lending protocols, allocates it to yield sources, and captures the spread.
DeFi is growing as more assets and yields are tokenized and used as collateral for leverage. Lending protocols are specializing and expanding horizontally to meet specific needs, which leads to rate dislocations across markets.
## Key Features
#### **Re-Lending**
Re-lending forms the supply side of the 246 Club market, functioning as a senior tranche that consistently earns Aave’s base rate (the most risk-adjusted yield in DeFi) while capturing additional yield through interest-rate arbitrage. Re-lenders receive indirect exposure to risk, which is mitigated by the junior-tranche equivalent (borrowers) in the market.
#### **Cross-Protocol Arbitrage**
Deposit collateral into high-yielding positions and borrow from lending protocols with the best interest rates to leverage arbitrage opportunities.
e.g., capturing the spread between Aave and Morpho by depositing USDC into a Morpho Vault (high yield) and using it as collateral to borrow from Aave (low borrow rate), then leveraging this position for higher returns.
## Thesis
1. **DeFi growth fuels lending market expansion.** New capital and value flowing into DeFi are wrapped and grow exponentially through a credit multiplier effect as they integrate with lending markets. Lending markets fuel DeFi growth, and DeFi drives lending market expansion. These markets expand horizontally, with isolated and independent markets created for each new asset or yield class onboarded on-chain. Because of unique collateral characteristics and market specifics, rates are dislocated and dynamic across each market. As DeFi grows, lending markets expand horizontally to meet leverage demands, creating more dislocated rates and interest-rate spreads.
2. **Lending markets are the ultimate downstream value-capture funnel of DeFi.** New yield sources, stablecoins, and assets come and go, but lending markets, positioned downstream, consistently capture value from DeFi’s expansion by rotating across the best opportunities. Interest-rate arbitrage is not only about exploiting local supply and demand imbalances; it is also about passively capturing new assets, value, and yields in DeFi without managing individual opportunities at the base layer.
3. **A conduit connecting credit and yield, the two core pillars of finance.** The core principle of lending, and finance, is directing idle capital to its most productive use; capital flows to the highest returns, much like water seeking the lowest ground. 246 Club scales this dynamic from individual lenders and borrowers to a protocol-to-protocol level, creating a marketplace that connects surplus liquidity to high-return strategies and captures the spread. As new asset classes and yield opportunities emerge, markets fragment further, each with distinct risk–return profiles. This fragmentation amplifies inefficiencies, and 246 Club is well positioned to thrive in this environment.
# Re-Lend
Source: https://docs.246club.xyz/docs/re-lend-supply/re-lend
Earn additional yields on your lending positions on Aave.
> **Re-Lend is the "supply side" of 246 Club**—similar to how you supply tokens to a typical lending protocol. Here, you supply **borrowing power** from Aave (via your aTokens) instead of supplying raw assets. This delegated borrowing power is then used by arbitrageurs on 246 Club, generating extra yield for you.
## Understanding Re-Lending
Re-Lending allows both new and existing Aave lenders to keep their principal and yield from Aave intact—always earning Aave’s deposit rate as a baseline—while earning extra yield by delegating their unused borrowing power to 246 Club. This delegated borrowing power fuels cross-protocol arbitrages, which in turn generate additional returns for re-lenders.
Let’s break down the key points:
* **Keep your Aave lending position**
You retain your aTokens and keep earning Aave’s deposit rate—no disruption to your baseline yield.
* **Delegate your unused borrowing power**
The borrowing capacity tied to your aTokens is shared with 246 Club. Arbitrageurs use this capacity to execute their strategies.
* **Cross-protocol Arbitrage**
Collateralize yield position from one protocol and borrow against it from another using the borrowing power delegated from re-lenders.
* **Capture extra yield**
Arbitrageurs pay an extra interest rate for tapping your borrowing power. That premium is your added yield on top of Aave's deposit rate.
#### **1) Background : Aave Lending Positions ( aTokens )**
On Aave, when you deposit (lend) assets like USDC or ETH, you receive **aTokens** (e.g., aUSDC or aETH). These serve two purposes:
1. **They represent your lending position and earn interest**
If you deposit 100 USDC, you get 100 aUSDC that grows over time (100 → 101 → 102, etc.) as interest accumulates.
2. **They can be used as collateral**
Aave lets you borrow against aTokens. If USDC’s LTV ratio is 80%, then your 100 aUSDC provides 80 USDC worth of borrowing power.
#### 2) Credit Delegation
When you re-lend, say, 100 aUSDC in 246 Club, you still earn Aave's interest on that 100 aUSDC. But you also **delegate** up to 80 USDC worth of borrowing power to 246 Club. 246 Club then lends out that borrowing power to arbitrageurs in the 246 Club ecosystem.
Read more about how these markets are structured \[[here](../architecture/market-structure)].
#### **3) Where Additional Yield Comes From**
The extra yield comes from arbitrageurs who use your delegated borrowing power to take out loans—sometimes against collaterals that Aave doesn't support. They pay a premium on top of the Aave borrowing rate. This premium goes back to you, the re-lender. \[ You can read more about how interest rate model of 246 Club works [here](../architecture/interest-rate-model) ]
Put differently:
> You’re still lending your assets on Aave for baseline yield, and you’re effectively lending your borrowing power on 246 Club for additional yield.
Instead of paying interest when you borrow, you earn more by delegating your borrowing power.
💡 **Example**
For instance, if MEV Capital Usual USDC offers a 10% yield on USDC deposits and Aave offers a 5% borrow rate on USDC, arbitrage activities that are only possible on 246 Club will cause the borrow rate to converge toward Morpho's deposit rate.
Normally, Aave's deep liquidity pool serves as a stabilizing force, mitigating the impact of interest rate arbitrage on its own rates. Arbitrage pressures in smaller, less liquid protocols often drive their interest rates to align with Aave's, rather than the other way around. As a result, Aave's rates remain more insulated from volatility caused by temporary arbitrage opportunities in other protocols.
Our interest rate model is designed to fully capture these opportunities, benefiting our re-lenders.
If Aave's borrow interest is 5% and we add an additional interest of **x%**, then the total borrow interest becomes 5% + x%, approaching Morpho's 10% deposit interest. This convergence is effectively captured by our interest rate model, resulting in extra yield for re-lenders.
# Considerations for Re-Lending
Source: https://docs.246club.xyz/docs/re-lend-supply/re-lend-considerations
Risks and mechanics to understand before re-lending on 246 Club.
## Risk of Aave
At 246 Club, we build our Re-Lending on Aave, a leading DeFi lending protocol with a strong history of security and resilience across multiple blockchain networks. While Aave’s proven track record gives us a solid foundation, our Re-Lending mechanism—using Aave positions like aUSDC as underlying assets—introduces specific risks. Here’s how we manage Aave-related risks to keep our markets stable.
Our primary exposure comes from the lending positions on Aave, such as aUSDC, that re-lenders use in markets like \[aUSDC]USDC. If bad debt (unrepayable loans) occurs in the aUSDC pool, it could affect your relent position. For example, if you re-lend 100 aUSDC, bad debt on Aave might impact the stability of that position in our market.
However, with Aave’s Optimistic Accounting, Aave delays the impact of bad debt on aTokens like aUSDC. If bad debt occurs, your 100 aUSDC won’t lose value immediately, giving us time to address the issue.
Also, Aave’s Umbrella feature will prevent small bad debt from accumulating and absorb any residual debt, further protecting your relent position.
For a deeper understanding, check Aave’s risk documentation on market volatility, smart contracts, and liquidations: [Aave Risk Documentation](https://aave.com/docs/concepts/risks).
## Liquidity Risk
In Re-Lending, liquidity risk arises when the demand for borrowing exceeds the available borrowing power, potentially limiting withdrawals from the pool. At 246 Club, we manage this risk carefully by monitoring the utilization ratio of each market and using mechanisms to balance supply and demand. Let’s break this down to understand how we calculate utilization, what it means for withdrawals, and how we ensure stability in our markets, like the \[aUSDC]USDC market.
**Utilization Ratio in Re-Lending Market**
The utilization ratio in a Re-Lending market tells us how much of the delegated borrowing power is being used. It’s calculated as:
`Utilization Ratio = Borrowing Power Used / Total Delegated Borrowing Power`
Let's take the \[aUSDC]USDC market as an example. Suppose a re-lender deposits 100 USDC on Aave, which becomes 100 aUSDC (Aave's token for deposited USDC). From this, they delegate borrowing power worth 80 USDC to the protocol. If arbitrageurs use 72 USDC of that borrowing power, the utilization ratio is:
`72 USDC (borrowed) / 80 USDC (delegated borrowing power) = 90%`
This 90% utilization ratio means that 90% of the available borrowing power in the \[aUSDC]USDC market is in use. The remaining 10% is what we call the underutilized portion, which plays a key role in managing liquidity and withdrawals.
**Withdrawals**
In the \[aUSDC]USDC market example, with a 90% utilization ratio, the remaining 10% of the delegated borrowing power is underutilized. This underutilized portion determines how much can be withdrawn from the total re-lent amount. Since the re-lender has 100 aUSDC in the market, the withdrawable amount is:
`100 aUSDC x 10% (underutilized portion) = 10 aUSDC`
This means that, at 90% utilization, only 10 aUSDC can be withdrawn from the market at that moment. The rest of the aUSDC is tied up supporting the 72 USDC that arbitrageurs have already utilized, ensuring the market remains stable for all participants.
**High Utilization and Liquidity Risk**
Liquidity risk becomes a concern when utilization gets extremely high—say, 95% or more. In such cases, the underutilized portion shrinks, meaning less can be withdrawn. For example, if utilization in the \[aUSDC]USDC market rises to 98%, only 2% of the delegated borrowing power is underutilized, so the withdrawable amount becomes:
`100 aUSDC x 2% = 2 aUSDC`
This limited withdrawal capacity is a natural part of pool-based systems during high demand. It ensures that the market maintains sufficient liquidity, protecting both re-lenders and the protocol.
**The 246 Interest Rate Curve**
The 246 Interest Rate Curve adjusts interest rates based on the utilization ratio. In pool-based lending models, interest rates often follow a curve where rates increase as utilization rises. For example, a typical model might set a low borrow rate (e.g., 2%) at 0% utilization, but as utilization approaches 100%, the rate could jump to 20% or higher. This encourages arbitrageurs to repay loans (reducing utilization) and attracts more re-lenders to deposit (increasing available borrowing power).
At 246 Club, our Interest Rate Curve works similarly. If the \[aUSDC]USDC market hits 90% utilization, the curve might increase the borrow rate for USDC, making borrowing more expensive. This discourages new borrowing and encourages arbitrageurs to repay their loans, lowering utilization. At the same time, higher utilization could increase the yield for re-lenders, incentivizing more aUSDC deposits, which adds more borrowing power to the market. These adjustments help the market return to a normal utilization level, like 70–80%, where withdrawals are easier and liquidity is more balanced.
## Collateral Risk
In Re-Lending at 246 Club, re-lenders lend assets on Aave (like aUSDC) against Aave’s collaterals while also lending their borrowing power against different collaterals on 246 Club.
Collateral risk arises when the value of assets used as collateral drops, leading to undercollateralization or bad debt. For example, if you re-lend 100 aUSDC on Aave, its value supports borrowing power delegated to our \[aUSDC]USDC market.
If the collateral on Aave (like aUSDC) or on 246 Club (like an arbitrageur's collateral) loses value, the position's health can decrease. If bad debt (unrepayable loans) builds up in these lending positions, it could impact the stability of your re-lent positions.
At 246 Club, we mitigate collateral risk to keep your re-lent positions stable by using careful strategies: we set Loan-to-Value (LTV) ratios, like allowing only 80 USDC of borrowing power from 100 Morpho USDC position (80% LTV), creating a buffer against collateral value drops that we adjust as market conditions change; we employ liquidation mechanisms to protect the market, partially liquidating undercollateralized positions on 246 Club to repay debt if collateral values fall too low ( Details on Liquidation Mechanism can be found [here](../architecture/liquidation) ); and we use Segmented Risk Exposure (SRE) to limit risk by dividing our single liquidity pool into segments with caps for each collateral, pausing borrowing if a collateral in the \[aUSDC]USDC market hits its 10% cap to shield the pool ( More [Details](../architecture/segmented-risk-exposure) ).
## Re-Lending for existing Borrowers of Aave
If you’re currently borrowing on Aave, you might be curious about how Re-Lending with 246 Club works alongside your existing loan.
Suppose you have 100 aUSDT on Aave, backing a 20 DAI loan. You don’t need to move your entire position to 246 Club. With Re-Lending, you can re-lend just a portion of your aUSDT to earn extra yield while keeping your Aave loan safe.
Here’s how it works:
* If you re-lend 20 aUSDT out of your 100 aUSDT, you’ll have 80 aUSDT left on Aave.
* This 80 aUSDT continues to support your 20 DAI loan.
* Your Loan-to-Value (LTV) ratio adjusts from 20% to 25% (20/80).
The decision is entirely yours. You can re-lend as much as feels comfortable, based on your personal risk and return preferences. This ensures your Aave position stays secure while you explore extra yield opportunities with 246 Club at your own pace.
## Risk Specific to Credit Delegation
#### 1) The Dual-Position Structure in Re-Lending
When an arbitrageur opens a loan position through 246 Club, two distinct positions are created:
1. **Aave Position**: This involves the re-lender's activity. A re-lender deposits assets (e.g., 100 USDC, which becomes 100 aUSDC on Aave) and delegates borrowing power (e.g., 80 USDC) to the protocol.
2. **246 Club Position**: This is the arbitrageur's cross-protocol position. The arbitrageur deposits collateral (e.g., 100 USDC on Morpho, a lending protocol integrated with 246 Club) and borrows 80 USDC using the delegated borrowing power from the re-lender.
The diagram below illustrates this process:
* **Re-Lender’s Flow (Purple)**: The re-lender re-lends 100 aUSDC on Aave and delegates borrowing power equivalent to 80 USDC.
* **Arbitrageur's Flow (White)**: The arbitrageur deposits 100 USDC as collateral on Morpho and borrows 80 USDC from Aave using the delegated borrowing power.
This dual-position structure is key to understanding liquidation risks, as the Aave position (tied to the re-lender) and the 246 Club position (tied to the arbitrageur) are interconnected but operate under different risk parameters.
**Isolating the Aave Position**
Focusing on the Aave position, we have:
* **Collateral**: 100 aUSDC (representing the 100 USDC deposited by the re-lender).
* **Debt**: 80 USDC borrowed from Aave using the delegated borrowing power.
This position has a Loan-to-Value (LTV) ratio of 80% (80 USDC borrowed against 100 aUSDC collateral). Aave’s liquidation threshold, typically higher than the LTV, determines when the position becomes undercollateralized and subject to liquidation.
**246 Club Position**
Meanwhile, the 246 Club position consists of:
* **Collateral**: 100 USDC deposited on Morpho.
* **Debt**: 80 USDC borrowed, utilizing the delegated borrowing power from the re-lender.
This position operates like a standard loan on a lending protocol, with its own LTV ratio and liquidation parameters. However, our focus here is on the Aave position, which introduces unique considerations due to the re-lending and delegation mechanics.
#### 2) Risk Management for the Aave Position
To mitigate the risk of liquidation on the Aave position, 246 Club employs several strategies, ensuring stability even in adverse market conditions.
**1. Matching Re-Lending and Delegation Assets**
Initially, 246 Club only allows identical assets for re-lending and delegation. For example, if the re-lending asset is aUSDC, the delegated borrow must also be in USDC. This ensures that price volatility or depegging of one asset relative to another does not trigger liquidation. Since both the collateral (aUSDC) and debt (USDC) are in the same asset, their values remain aligned, maintaining the position’s health factor.
**2. Leveraging Aave’s Risk Management**
By building on Aave, 246 Club inherits Aave’s robust risk management framework. Aave uses optimistic accounting, meaning bad debt isn’t immediately realized as a loss in aUSDC value. This delays liquidation unless the bad debt on Aave reaches a critical level where the entire borrowed amount (e.g., 80 USDC) becomes unrecoverable. Additionally, Aave’s upcoming Umbrella feature will provide further protection against such risks.
**3. Handling Interest Accumulation**
Even with identical assets, interest accumulation poses a liquidation risk. The borrow rate on Aave (e.g., for USDC) is always higher than the deposit rate due to the utilization spread. Over time, this net negative APY can erode the position’s health factor.
For example, historical data shows that using ETH as both the re-lending and delegation asset results in a net APY of -0.72%. With a 2.5% gap between the LTV and liquidation threshold, it would take approximately three years for the position to be liquidated due to interest accumulation alone.
**4. Buffering Against Volatility**
To counter risks like depegging or sudden spikes in borrow rates, 246 Club builds in a buffer. Instead of borrowing the full 80 USDC at an 80% LTV on 100 aUSDC, they might allocate 110 aUSDC as collateral. This extra 10 aUSDC acts as a cushion, absorbing potential losses. The buffer size is determined by analyzing historical deviations and Net APY trends in Re-Lending / Delegation asset pairs.
**5. The adjustDelegation Function**
246 Club introduces a public function called adjustDelegation. If a position’s health factor drops below a set threshold, anyone can trigger this function to add more aToken collateral (e.g., aUSDC) from the re-lending pool to the Aave position. This restores the position to a safer health factor range. The function is supported by:
* A primary bot connected to multiple nodes.
* A secondary bot as a backup.
* Manual intervention by the 246 Club team or users.
Unlike deleveraging, which relies on external liquidity, adjustDelegation simply adds more collateral( aToken ) to the Aave position from our re-lending pool, making adjustment failures highly unlikely.
#### 3) Extreme Scenarios for Liquidation
Liquidation on the Aave position would only occur under highly unlikely conditions:
1. **Rapid Interest Rate Spikes**: Interest rates accelerate toward the LTV limit, overwhelming the buffer, while both primary and secondary bots (and manual intervention) fail to trigger adjustDelegation.
2. **Major Stablecoin Depegging**: A swift depegging of stablecoins pushes the position past the buffer, with bots and manual intervention failing to act in time.
These scenarios are precisely what 246 Club’s multi-layered protections are designed to prevent.
#### 4) What Happens If Liquidation Occurs?
Despite these safeguards, liquidation on the Aave position is still possible in extreme scenarios. Let’s explore what happens if liquidation occurs, considering Aave’s close factor of 50% (meaning 50% of the position is liquidated to repay debt).
**Liquidation on Aave**
If the Aave position is liquidated:
* **Collateral**: 100 aUSDC is reduced to 60 aUSDC (after a liquidation penalty).
* **Debt**: 80 USDC is reduced to 40 USDC (50% repaid during liquidation).
This leaves a remaining debt of 40 USDC on Aave.
**Impact on the 246 Club Position**
The 246 Club position still shows a debt of 80 USDC, secured by the arbitrageur's 100 USDC collateral on Morpho. When this debt is repaid or further liquidated:
* The 80 USDC repayment covers the remaining 40 USDC debt on Aave.
* The remaining 40 USDC (after securing 60 aUSDC worth of collateral on Aave) is returned to the pool.
This process effectively covers the liquidation loss on Aave, except for the liquidation penalty, which is absorbed by additional interest earned on 246 Club or a dedicated reserve - to be introduced in the near future.
# Re-Lending UI Guide
Source: https://docs.246club.xyz/docs/re-lend-supply/re-lending-ui-guide
How to use the UI for re-lending on 246 Club.
Screenshots in this guide reflect a previous version of the UI. We’ll update them soon. The core flows and concepts remain the same.
# Re-Lending UI Guide
Please note that the term "Restake" has been updated to "Re-Lend." All references to "Restake" in the UI guide have been replaced with "Re-Lend" in the official user interface.
As outlined in the [Market Structure section](docs/architecture/market-structure), each market on 246Club consists :
* Re-Lending **Asset**: The asset that re-lenders supply (typically aTokens).
* **Delegation Asset**: The borrowing power derived from re-lenders' collateral, used by arbitrageurs to access capital.
Since the **re-lending asset** is what users directly interact with on the interface, this guide will focus on that side of the UI.
## Re-Lending Table
#### Re-Lending Asset Column
The leftmost column in the UI displays all supported **re-lending assets**—typically Aave’s aTokens like aUSDC, aDAI, etc.
However, users without existing aToken holdings can also choose to supply the **underlying asset** (e.g., USDC). Next to each aToken, you’ll also see its **underlying asset** (e.g., USDC for aUSDC, ETH or WETH for aWETH).
In that case, the protocol will:
1. Deposit the underlying into Aave.
2. Receive the corresponding aToken.
3. Automatically re-lend the aToken into 246Club.
> Note on ETH: Both ETH and WETH are supported as re-lending options, since Aave and 246 treat them equivalently when minting aWETH.
Whether you deposit an aToken or its underlying asset, the result is the same—you end up with a re-lent position in the 246 Club market. This feature simply provides flexibility for users without existing Aave positions.
#### Balance Column
Balance column shows the total amount of assets available in your wallet for re-lending.
When you hover over the balance number, you’ll see a breakdown of:
* The amount of the **aToken** (e.g., aUSDC) you hold.
* The amount of the **underlying asset** (e.g., USDC) you hold.
* The **combined total** of both.
#### APY Column
APY column displays the **Annual Percentage Yield (APY)** you’ll earn by re-lending.
Hovering over the **APY** column reveals a breakdown of:
* **Underlying APY**: The base interest rate you earn from supplying the aToken on Aave (e.g., the supply rate for aUSDC). This is a guaranteed return.
* Re-Lend **APY**: The additional yield you earn by re-lending your aToken and delegating its borrowing power in the 246 Club market.
* **Combined APY**: The total of the two rates.
The combined APY helps you estimate the full return on re-lending.
[Learn more about how Re-Lend APY works](docs/re-lend-supply/re-lend#3-where-additional-yield-comes-from)
## Re-Lend Modal
Clicking the supply button opens a modal where you can configure how much you want to re-lend.
There are three sections: one for re-lending aTokens and another for underlying assets and the summary section.
#### 1. Aave Position Section
At the top, you'll see a box with the Aave logo. This shows your current aToken balance and borrowing status on Aave tied to the aToken you’ve selected (e.g., aUSDC or aWETH).
If you already have a loan on Aave, your aTokens are likely being used as collateral. In that case, withdrawing and re-lending too much could impact your **health factor**.
We show:
* Current collateral and borrow value
* Estimated LTV after re-lending
* A visual indicator of the safe threshold
Make sure you stay above the safety threshold to avoid liquidation.
[More on managing Aave positions safely](docs/re-lend-supply/re-lend-considerations#re-lending-for-arbitrageurs-on-aave)
#### 2. Underlying Asset Section
Below the Aave box is where you can re-lend **underlying assets**.
* You can input any amount within your wallet balance.
* For ETH-based assets, WETH is used by default. You can also enable native ETH by checking the **“Allow ETH”** option.
You can use either or both fields—re-lending will combine the amounts.
#### 3. Summary Section
Once you’ve entered your desired inputs, you’ll see the **Total Re-Lent Amount** reflected. Confirm the transaction to complete re-lending.
## My Position
After a successful transaction, you’ll be redirected to the **My Position** page.
Even if you’ve re-lent the underlying asset, your re-lending balance will be shown denominated in your aToken balance.
This table is similar to the original re-lending table, with one key difference:
* **Balances here reflect your** re-lent **amount**, not what remains in your wallet.
***
# Integrations
Source: https://docs.246club.xyz/docs/resources/integrations
coming soon
# Security
Source: https://docs.246club.xyz/docs/resources/security
#### 246 Core
The 246 Club Core has undergone three independent audits, with further audits planned.
* Two independent audits conducted by seasoned auditors from reputable firms with proven track records.
* MixBytes — see the report below.