# Borrow
Borrowing tokens via the XOXNO Protocol allows users to access liquidity by using their supplied tokens as **collateral**, meaning they can access funds without selling their assets. However, borrowers face the **risk of liquidation** if their collateral value drops too low.
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**Key Features**
* **Dynamic Interest Rates:**
* Interest rates **adjust dynamically** based on borrowing demand.
* As more liquidity is borrowed, the **utilisation rate** (the percentage of available funds being used) increases.
* Higher utilisation rates lead to **increased interest rates**, balancing supply and demand.
* **Collateral Management:**
* Borrowers can use their deposited tokens as **collateral** for loans.
* **Health factor**: A key metric indicating the safety of a borrowing position. A higher health factor means the loan is well-collateralized.
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Each token reserve is designed with specific rules to balance rewards for both borrowers and suppliers. \
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To avoid liquidation, borrowers should **monitor their collateral value and "health factor"** (a measure of how safe their borrowing position is), ensuring their loans remain sufficiently covered as market conditions or interest rates change.
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