Variable-rate borrowing on Fira gives you maximum flexibility: no maturity, no fixed repayment schedule, and the ability to repay at any time. The tradeoff is that your interest rate moves with market conditions.
How it works
You deposit collateral, borrow USDC at the current market rate, and hold the position as long as you want. Interest accrues continuously on your outstanding balance. You repay whenever it suits you — partially or in full.
The rate you pay today may be different from the rate you pay next week. It reflects live supply and demand for USDC liquidity in the market.
Accepted collateral:
wstETH — wrapped staked ETH (Max LTV: 87%, LLTV: 89%)
cbBTC — Coinbase Wrapped BTC (Max LTV: 88%, LLTV: 90%)
Debt token: USDC in both cases.
Worked example
Detail | |
Collateral deposited | wstETH (~$10,000 value) |
Borrowed | 1,500 USDC |
Rate at entry | 3.8% APY |
Holding period | 3 months |
Average rate over period | ~4.1% APY |
Interest accrued | ~$15.4 USDC |
Total repayment | ~1,515.4 USDC |
The final amount owed is not known at entry — it depends on how rates move over your holding period.
Key differences from fixed-rate
Fixed-Rate | Variable-Rate | |
Rate | Locked at entry | Changes in real time |
Maturity | Yes — defined date | None |
Repayment amount | Known upfront | Principal + accrued interest |
Flexibility | Repay at maturity (or early) | Repay anytime, any amount |
When to choose variable-rate
Variable-rate borrowing fits well when:
You need liquidity for a short or unpredictable time horizon and don't want to be locked to a maturity date.
You expect rates to remain low or fall over your borrowing window.
You want the ability to partially repay as you go, reducing your interest exposure.
You are using wstETH or cbBTC as collateral (these assets are only available in variable-rate markets on Fira V1).
If you want full cost certainty and are comfortable with a fixed horizon, fixed-rate borrowing is the better fit.
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