# Credit Delegation

Credit delegation allows a supplier to contribute liquidity to the <code class="expression">space.vars.FORK\_NAME</code> protocol to earn interest, and delegate borrowing power (i.e. their credit) to other users. The enforcement of the borrow position and its terms are agreed upon between the supplier and borrowers, which can be either offchain via legal agreements or onchain via smart contracts.

This enables:

* The supplier (aka delegator) to earn extra yield on top of the yield they already earn from the protocol.
* The borrowers (aka delegatees) to access uncollateralized liquidity.

Borrow by *delegatee* must be consistent with *delegator* eMode category. For eg. if a delegator eMode category is STABLECOINS, then

* Delegator can only borrow STABLECOINS eMode category asset.
* In case *delegator* approve credit to *delegatee* for non STABLECOINScategory (for eg. weth), then borrow would revert.

The *delegatee* cannot abuse credit approval to liquidate *delegator* i.e. if the borrow puts *delegator's* position in HF < HEALTH\_FACTOR\_LIQUIDATION\_THRESHOLD, then borrow will fail.

### Approving the delegation

The approveDelegation or delegationWithSig function on the VariableDebtToken contract must be called by the supplier (delegator), approving the borrower (delegatee) a certain amount.

This is done for each debt token that needs to be delegated.

The delegator does not need to already have supplied funds in the protocol to approveDelegation. However, **before** the delegatee executes borrow, there must be sufficient collateral supplied by delegator in the protocol.

### Borrowing the credit

The borrower (delegatee) calls the borrow function on the Pool, using the supplier's (delegator's) address in final parameter onBehalfOf.

The borrower's available credit is reduced by the borrowed amount.

### Repaying the credit

Anyone can repay the borrow position *OnBehalf* of the user, by calling one of the following Pool functions - repay or repayWithPermit. The supplier (aka creditor) can also use the repayWithATokens function to repay a borrow position with their *aTokens* of the underlying asset in the same pool.

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