How our lenders flexibly earn interest
You deposit into a single liquidity pool (the “variable pool”). You can optionally opt into fixed‑rate markets and set per‑market allocation limits (e.g., “up to 50% of my deposit can fund 50% LTV 8.9% fixed loans, while 25% can fund 85% LTV 10.9% fixed rate loans”).
How you earn interest (variable + fixed)
- Variable earnings: The portion of your deposit not currently funding fixed loans earns a utilization‑based variable rate. When utilization (borrowed ÷ supplied) rises, variable rates rise (up to 20%); when it falls, rates fall. We target 90% utilization to maximize lender returns.
- Fixed earnings: When a borrower takes a fixed‑rate loan, the protocol sources funds from the shared liquidity pool from lenders who opted in to that fixed rate market. That portion of your deposit earns the borrower’s locked fixed rate until repayment. When the borrower repays, those funds move back to variable earnings. Fixed rate markets are targeted to earn higher interest than variable markets.
Why your funds are safe
Borrowers post collateral and must maintain a health factor. If a position becomes breaches 90% LTV, it becomes liquidatable via our dutch auction mechanism:
- The position is listed for auction (debt + collateral are always visible).
- Bidders bid to repay/assume the debt in exchange for the collateral (with a target bonus paid to lenders and bidders at 5% each).
- Auction results repay the pool, making lenders whole while the bidder receives the collateral.
How withdrawals work
- Withdraw from variable: You can withdraw up to 100% of available liquidity (assets not currently borrowed). If withdrawals reduce supply while borrows stay constant, utilization increases and the variable rates increase. This creates a market incentive to draw additional funds into the variable market.
- Withdraw with fixed: When borrowers repay fixed rate loans, those allocations are returned to variable markets. Lenders withdrawing funds from fixed rate loans swaps your current allocation with other lenders who want exposure to that market. In the event there are no lenders who want exposure to that market, lenders can turn off allocations to that market and wait for borrowers to repay.
The most important thing
You control your risk/return mix with one simple knob: allocation limits. Stay mostly variable for maximum liquidity and rate responsiveness, or allocate to fixed markets for more predictable yield—without splitting deposits across separate pools.
Screen Recording 2026-02-02 at 4.40.16 PM.mov
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