# Collateral Lending

Users can use their $Kairos tokens as collateral to borrow other assets in the ecosystem, such as $stETH and $GMX. The amount of borrowed assets that can be obtained using $Kairos tokens as collateral is determined by the current backing price of $Kairos. The maximum amount that can be borrowed is limited to 40% of the backing price, with a liquidation threshold of 50%. Assuming each $Kairos token has a backing price of A, the value of the borrowed assets is B, where B = A \* 40%. Interest must be paid to the Kairos protocol when borrowing assets using $Kairos as collateral. In the event that the liquidation threshold is reached, the collateral provided by the user ($Kairos tokens) will be destroyed by the Kairos protocol. It is important to note that the liquidation process will not result in a decrease in the price of $Kairos; on the contrary, it will help raise the backing price of $Kairos, as the supply of $Kairos will decrease after the collateral is destroyed.