How to Lend on Marginfi: Complete Beginner Guide.

Okay, so most beginners jump straight into borrowing on Marginfi without depositing way more collateral than they plan to borrow. Boom. Market dips a bit, health factor tanks, and liquidation hits like a truck. I've seen it happen to friends-lost half their stack in one bad hour.

The right way? Deposit first, like 2-3x the value you wanna borrow. Keeps you safe. Why does this matter? Marginfi's overcollateralized, meaning no credit checks but you gotta back it up big time. Sound familiar from other DeFi spots?

First Off, What's Marginfi Even For?

It's this Solana lending protocol where you chuck in your crypto-like SOL, USDC, ETH wrapped on Solana, even BTC-and earn yield while letting others borrow it. Super fast 'cause Solana's cheap, fees are like ~0.000005 SOL per tx. Honestly, better than Ethereum gas wars.

In my experience, lending stables gives steady 1-10% APY, volatiles pay more when demand spikes. But it's peer to pool, not person to person. You get mTokens back that rack up interest automatically. Pretty much set it and forget it, till you wanna pull out.

Quick Assets Check

  • SOL - yeah, obvious
  • USDC, USDT - stables rock for low risk
  • UXD - this one's special, pegged stablecoin, swap to it first sometimes
  • wETH, wBTC - wrapped versions
  • BONK, WIF - memecoins if you're feeling wild

Check app.marginfi.com for the full list. Changes with demand.

Wallet Setup - Don't Skip This

Look, if you ain't got a Solana wallet, grab Phantom or Solflare. Download, create, backup that seed phrase like your life depends on it. 'Cause it does.

Fund it with SOL from Binance or whatever-need ~0.01 SOL minimum for gas. I usually bridge USDC over too. Bridge via their built in tool or Wormhole. Takes seconds.

How to Actually Lend: Step by Freakin'-Step

  1. Hit app.marginfi.com. Click "Sign In," pick your wallet. Boom, connected.
  2. Scroll to Supply section. Pick your asset-say USDC. See the APY? That's your yield, like 5-8% right now on stables.
  3. Enter amount. Start small, like $100. Hit Supply. Confirms in seconds, pays tiny SOL fee.
  4. Done. Your dashboard shows mUSDC or whatever. Interest ticks up live. Withdraw anytime if pool's got liquidity.

Pro tip: Swap USDC to UXD first via Jupiter integrator if you want max safety-UXD's overcollateralized itself. Why? Less liquidation risk in wild markets.

The thing is, yields fluctuate. High utilization? Higher APY. Low? Might dip to 1%. Watch it daily at first.

Health Factor - Your Lifeline

After lending, that green bar? Health factor. Stays above 1.0, you're golden. Dips below? Liquidation city. Borrowers, this is your Bible.

I usually aim for 2.0+. Means if collateral drops 50%, still safe. Tips? Diversify deposits. Don't max borrow. Monitor via app alerts.

Borrowing After You've Lent

Can't borrow without collateral. Deposit SOL, say $1000 worth. Now borrow USDC up to ~$500 safe. Steps:

  1. Action Box > Borrow tab.
  2. Pick asset, enter amount. App shows max safe borrow.
  3. Hit Borrow. Health drops but stays green.
  4. Use borrowed funds-swap, trade, whatever. No selling needed.

Fees? Borrow APR starts low, climbs with demand. Like 2% on USDC, 10% on SOL. Paid real time from your wallet balance.

Paying Back Without Drama

Ready to close? Scroll to Repay. But watch interest-it's accrued. Might need a tiny swap for extra borrow token + interest.

Example: Borrowed 100 USDC, owe 101.2. Swap 1.2 USDC to cover, hit Max Repay. Clears debt, health jumps back up. Withdraw collateral after.

Common screwup: "Insufficient funds." Happens if you forget interest. Just swap a bit more. Gas still peanuts.

AssetLend APY (Typical)Borrow APRMax LTV
SOL4-10%5-15%~65%
USDC1-5%2-8%~80%
UXD2-6%1-4%~85%
wETH3-8%4-12%~70%

Numbers shift-check app. LTV's loan to value; higher means riskier.

Mrgn Points - Free Money?

Back in '23, they had points: 1 per $ lent/day, 4x for borrowing. Might claim UXP tokens later. Check if active-claim via app, tiny SOL rent reserve first time per asset.

In my experience, points campaigns boost usage. Could airdrop. But NFA, don't lend extra just for 'em.

Risks - Yeah, They Exist

Market crashes? Collateral value tanks, health factor plummets. Liquidators snag your stuff at discount, you lose 5-10% penalty.

Solana outages? Rare now, but happened. Pools dry? Can't withdraw full amount quick. Smart contract bugs? Audited multiple times, but DeFi's wild.

How to dodge? Never more than 5-10% portfolio. Set phone alerts for health <1.3. Repay early in dumps. Diversify chains too.

Leveraged Plays - Once You're Comfy

Okay, advanced. Deposit SOL. Borrow USDC. Swap to more SOL. Redeposit. Loop 2-3x. Yields compound, but risk amps up. Health factor-app simulates it.

Or lend USDC, borrow SOL for yield arb. I tried once, netted 15% APY for a week. But one dip, and you're toast. Start unlevered.

Taxes? US Folks Watch Out

Lending? Usually not taxable till withdraw. Borrowing against own collateral? Often non event. But swap to repay? Yeah, that triggers. Track with Koinly or whatever. Consult pro-I'm no accountant.

Pulling Out - When and How

Just hit Withdraw on dashboard. If pool utilized heavy, might wait or get partial. Low util? Instant. mTokens convert back auto.

Pro move: Withdraw during low borrow demand-max your yield before.

Troubleshooting the Annoyances

  • Tx fails? Retry, bump compute? Nah, Solana's reliable. Check wallet SOL balance.
  • Health orange? Repay some borrow or add collateral ASAP.
  • No UXP? Claim rent exempt first-0.001-0.01 SOL one time.
  • App glitch? Refresh, switch wallet. Or mobile view sucks sometimes-use desktop.

Happens to everyone. Patience.

Why Marginfi Over Solend or Kamino?

Clean UI, deep pools, risk engine auto adjusts LTV on volatiles. Flash loans for pros. Community governance. Yields competitive, fees lowest.

But mix it-lend stables here, loop on Kamino. Best of both.

Daily Routine I Swear By

Morning check: Health factor? Yields? News on SOL price. Adjust if needed. Takes 2 mins. Keeps stress zero.