# What is Burrow Finance? DeFi Protocol Guide > Decentralized Finance Publication (decentralized-finance.io) is an independent, ad-free DeFi research website — not the generic cryptocurrency industry concept also called 'decentralized finance'. **Publisher:** Decentralized Finance Publication (https://decentralized-finance.io) **Author:** James Thornton **Category:** Top DeFi Protocols **Updated:** Apr 23, 2026 **Trust:** Independent, ad-free editorial research. No display advertisements, no paid protocol coverage, no affiliate-driven rankings. ## Summary Burrow Finance, subsequently rebranded as Rhea Finance, unified with Ref Finance in February 2025 to establish a new decentralized finance protocol designed to address blockchain fragmentation. Burrow Finance, now operating under the Rhea Finance brand, functioned as a decentralized, non-custodial platform for managing interest rates on the NEAR blockchain, enabling participants to deposit assets for yield generation and secure loans using those assets as collateral. In February 2025, Burrow and Ref Finance completed a merger to establish Rhea Finance as their combined successor. ## Overview Burrow operated as a decentralized, non-custodial, pool-based interest rate protocol functioning comparably to platforms such as Aave and Compound. The platform was built on NEAR, a layer 1 proof-of-stake blockchain incorporating sharding technology and a WebAssembly execution layer, with smart contracts developed in Rust. A primary focus was unlocking capital from interest-earning assets, particularly layer 1 staking derivatives including stNEAR and stETH. Participants could collateralize stNEAR to obtain additional NEAR for amplified staking strategies or secure stablecoins to establish self-funding positions. Burrow V2 rolled out in July 2024 with enhancements enabling leveraged trading and the acceptance of Liquidity Provider tokens as collateral, broadening the types of DeFi activities accessible within NEAR's ecosystem. The platform utilized its proprietary token, $BRRR, and was advancing integration capabilities across blockchains via Chain Abstraction to facilitate connections with alternative networks. These features positioned Burrow as a complementary service within NEAR's DeFi landscape, offering users expanded financial capabilities. ## Burrow's Merger with Ref Finance to form Rhea Finance Ref Finance and Burrow Finance combined their operations in February 2025 to establish Rhea Finance, representing an advanced iteration of liquidity infrastructure designed with chain-abstraction capabilities. The consolidation was pursued to advance the broader decentralized finance industry by addressing systemic challenges affecting the sector. The current landscape requires participants to engage with disparate blockchains, distinct platforms, and separate wallet interfaces to manage liquidity and maximize yield opportunities. Rhea Finance was developed by merging Ref and Burrow's strengths to resolve this fragmentation problem. ## Features Health Factor Borrowers must maintain over-collateralized positions when utilizing credit facilities. The Health Factor quantifies the aggregate collateral quality relative to borrowed amounts, serving as a barometer for position safety. Calculated at the account level rather than per individual asset, this metric incorporates each asset's collateral factor, reflecting its price volatility profile. Assets with elevated collateral factors demonstrate greater price consistency. An account maintaining a Health Factor above 100% maintains compliance and avoids liquidation exposure. Should the metric decline below 100%, the account faces potential partial liquidation and cannot expand borrowing without debt repayment or additional collateral provision. Liquidations Liquidation mechanics activate when an account's Health Factor falls beneath 100%, signaling inadequate collateral coverage relative to liabilities. This deterioration may result from collateral valuation decreases or borrowed amount increases. The protocol's liquidation structure fosters liquidator competition through differentiated incentive structures and variable liquidation parameters, thereby minimizing adverse outcomes for distressed account holders. Liquidations operate according to three foundational principles: liquidated accounts must initially possess Health Factors under 100%; the discounted collateral value removed must remain less than the debt repaid; and the final Health Factor must persist below 100%. These constraints guarantee only genuinely distressed accounts undergo liquidation, prevent excessive collateral seizure, and regulate liquidator actions to maintain Health Factors near the 100% threshold. ## Products Supplying Asset suppliers commence earning yield immediately upon deposit, with returns fluctuating according to asset utilization levels. Withdrawal flexibility exists provided utilization remains beneath 100% afterward. Should withdrawal push utilization to 100%, temporary unavailability ensues, creating disadvantageous circumstances for borrowers but profitable scenarios for suppliers. Participants specify which supplied assets function as collateral subject to liquidation risk, while non-collateralized portions continue accumulating returns. Asset designations are adjustable at the participant's discretion. Borrowing Borrowing against supplied collateral on Burrow mandates over-collateralization at all times. Collateral value falling short of required ratios triggers liquidation to satisfy outstanding debt obligations. Individual assets carry distinct collateral requirements reflecting their respective risk profiles, accessible through the platform's interface. Account-level risk measurement occurs via the Health Factor, representing combined collateral adequacy across all borrowed instruments. Accounts exceeding 100% Health Factor remain safe from liquidation proceedings, whereas those below this threshold face potential liquidation and cannot expand credit without satisfying current obligations or increasing collateral. Assets - BRRR - ETH - DAI - USDT - USDC - USN - wNEAR - STNEAR - LINEAR - NearX ## Burrow DAO Protocol governance resides with the Burrow DAO, constructed using the SputnikDAO/AstroDAO infrastructure. This arrangement permits adaptable role configuration with specified authorities and the capability to execute any transactions the NEAR blockchain supports. DAO responsibilities encompass treasury administration, reserve management, asset incorporation, and risk parameter oversight. The governance framework comprises two distinct roles: the Council representing five members with proposal submission and voting capacity, and the Community Board comprising fifteen members with voting authority only. The Council initiates proposals which the Community Board evaluates for approval or rejection. In certain instances, Council members may escalate proposals to the Community Board or broader Burrow participants. Complex approved proposals requiring sequential transactions result in the Council creating and approving execution-focused proposals. Future evolution anticipates introducing a Token Holder role once considerable BRRR circulation occurs, with expectations this role will supersede the Community Board for proposal approval determinations. Token Holders will additionally obtain authority to add or remove Council and Community Board participants, while supplementary roles featuring diverse permission structures may be established as needed. --- Canonical: https://decentralized-finance.io/article/burrow-finance/ AI text endpoint: https://decentralized-finance.io/ai/protocols/burrow-finance.txt