vdTokens

Variable Debt vdTokens

vdTokens (variable debt tokens) are minted when users borrow assets from the protocol. They track the user’s debt balance, including both principal and accrued variable interest.

• Primary function: represent the outstanding amount owed by the user to the protocol.

• Interest accrual: the vdToken balance increases dynamically as variable interest is applied to the borrowed amount.

• Example: when borrowing USDC, the user receives vdUSDC. The balance of these tokens grows until the loan is repaid.

• User role: vdTokens serve as the user’s “proof of debt” and must be repaid to close the borrowing position.

👉 In short: vdTokens represent the debtor (borrower) side of the protocol.

Topic	Detail
Symbol format	vd, e.g. vdWETH, vdUSDC
Lifecycle	• Minted when you borrow the underlying asset. • Burned when you repay the loan (partially or fully).
Valuation	Maintains a 1:1 peg to the borrowed asset. Your vdToken balance increases over time as variable interest accrues.
Interest accrual	Each reserve has a variable debt index. When the index increases, your vdToken balance scales up proportionally, no user action required.
Wallet visibility	vdTokens are standard ERC-20 tokens and can appear in most wallets; you may need to add the contract address manually.
Repayment	Navigate to Dashboard → Borrowings → Repay to reduce or close your debt. The protocol burns the vdTokens and decreases the outstanding loan balance accordingly.