¶ Basics of lending on Sovryn
Sovryn allows you to earn a passive income through lending your funds. You can earn interest without relinquishing your assets to a third-party custodian. Sovryn is a decentralized finance platform that requires no permissions and will never take custody of your coins. The platform offers core features such as lending that can elevate decentralized finance for Bitcoin to a whole new level.
¶ Mechanism
When you lend on Sovryn, your assets are deposited to a lending pool from which funds can be borrowed directly or used in margin trading positions. The APY (annual percentage yield) is the interest rate paid to all lending pool participants. This value changes according to the demand and supply for lending. Interest payments made by borrowers are distributed to lenders in the asset lent. Borrowed funds are funds that have been taken out of the pool by borrowers. You are not entrusting your holdings to a centralized custodian or a multi-signature (joint) custodian that issues digital IOUs for your assets. The arrangement is entirely non-custodial. Borrowed funds are overcollateralized by borrower assets locked in a smart contract to protect the assets you lend. These collateral assets are subject to automatic liquidation if the collateral ratio falls below a threshold.
¶ Withdrawal of funds
You may withdraw your funds at any time with no penalty as long as funds in the lending pool are available and not being borrowed. Under ordinary circumstances, sufficient funds should be available for withdrawal. When available funds (funds that are still in the lending pool and available for borrowing or withdrawal) are in short supply, the system sets the interest rate progressively higher to discourage borrowing and encourage lending. When liquidity is abnormally low, the withdrawal amount may be less than the initial deposit. In this case the system will raise interest rates dramatically to reward lenders. A high APY will typically attract more deposits from lenders and loan payoffs by borrowers, resulting in a rapid increase in funds available for withdrawal. Thus, the system dynamically adjusts to reward lenders for the cost and risk of illiquidity.
¶ Lending rate
The Lend APY shown in the dapp is the current annual percentage yield (interest rate) being paid to users lending the selected asset. The APY varies according to the demand and supply for lending on the Sovryn platform. That is, it can change based on deposits or withdrawals in the lending pool as well as amounts borrowed or paid back on existing loans. You can learn about how the borrowing rate is set. However, the relationship between the Lend APY and the Borrow APY is complex due to the following factors:
- All lending pool participants are paid a pro rata share of borrower interest payments even though only a portion of lending pool funds are actually being borrowed.
- Each borrower will have an individual loan size, an individual start and end date to the loan period, and an individual interest rate for the duration of the loan that depends on what was available at the time of the loan. The aggregate of these different rates and payment sizes determines the interest income distributed to lending pool participants.
Note that interest payments made by borrowers are distributed to lenders in the same asset that was lent, not the collateral asset held by the borrower.
¶ How to lend
Note that you can only lend DLLR and BTC on the dapp. You can lend all assets on the alpha dapp.
¶ 1. Access the dapp
- Go to https://sovryn.app to access the dapp.
¶ 2. Get started
- On the top-right of the screen, click the Get Started button to connect your wallet, and follow the on-screen instructions. If you have not already set up your wallet to connect with the Sovryn dapp, visit the Wallet Setup Guide section before proceeding further.
¶ 3. Select Earn → Lend
- From the top navigation menu, select the Earn tab and then the Lend option.
¶ 4. Select the asset to lend
- Select the asset you would like to lend. The graphic below uses the BTC asset as an example.
¶ 5. Enter the amount to lend
- Enter the amount you want to lend in the Amount field.
- Read and check the terms of the loan after having read the “Basics of lending on Sovryn” section.
- Double-check your selections and click the Confirm button.
¶ 6. Confirm your transaction
You will be shown a deposit summary. Check your selections and then click the Confirm button.
You will be prompted by your wallet to confirm the transaction.
- Confirm the lending process using your wallet.
Please be advised that the current transaction fees should be in the range of 0.065 GWEI.
Congratulations! You have successfully lent your funds to the Sovryn lending pool.
¶ 7. Overview
Your Lend status can be viewed on the Lend page, showing each detail of every lending position you have. You can also use this to Adjust the balance of your loan by either depositing or withdrawing funds if they are available.
¶ How to lend on the Alpha dapp
Note that you can also lend DLLR and BTC on the newer dapp.
Follow these steps to lend on the Sovryn platform.
¶ 1. Access the Sovryn Alpha dapp
- Go to https://alpha.sovryn.app to access the Sovryn Alpha dapp.
¶ 2. Connect your wallet
- On the top-right of the screen, connect your wallet by clicking the Connect Wallet button.
If you have not already set up your wallet to connect with the Sovryn dapp, visit the Wallet Setup Guide section before proceeding further.
¶ 3. Select Finance → Lend
- From the top navigation menu, select the Finance tab and continue with the Lend option.
¶ 4. Select the asset to lend
- Select the asset you would like to lend. The example below uses the RBTC asset as a demonstration.
¶ 5. Enter the amount to lend
- Enter the amount you want to lend in the Amount to deposit field.
- Double-check your selections and click the Deposit button at the bottom of the popup.
¶ 6. Approve & Confirm your transaction
After selecting the Deposit option in the previous step, you will be prompted by your wallet to perform approval and confirmation.
- Confirm the lending process using your wallet.
Please be advised that the current transaction fees should be in the range of 0.065 GWEI.
Congratulations! You have successfully lent your funds to the lending pool on the Sovryn platform.
¶ 7. Overview
Your Lending History can be viewed at the bottom of the page, showing each detail of every lending activity you make.
¶ How to withdraw or adjust lending pool funds
Note that some lending pools can only be accessed on the alpha dapp.
A user has an outstanding loan right after completing a successful lending transaction. To withdraw a loaned asset, follow the steps below.
¶ 1. Access the dapp
- Go to https://sovryn.app to access the dapp.
¶ 2. Get started
- On the top-right of the screen, click the Get Started button to connect your wallet, and follow the on-screen instructions.
¶ 3. Select Earn → Lend
- From the top navigation menu, select the Earn tab and then the Lend option.
¶ 4. Select the asset to adjust
- Select the asset you would like to adjust (withdraw or deposit). The example below uses the BTC asset as an example.
- Select the Adjust button on the asset row that you would like to adjust.
¶ 5. Enter the amount to withdraw or deposit
- Select either the Deposit or Withdraw tab.
- Enter the amount you want to withdraw or deposit in the lending pool in the Amount field. Note that you can withdraw a portion of your funds.
- Alternatively, you can click the Max button to withdraw or deposit the entire amount available for the selected asset.
- Double-check your selections and click Confirm at the bottom of the popup.
¶ 6. Confirm your transaction
You will be shown a withdraw (or deposit) summary. Check your selections and then click the Confirm button.
You will be prompted by your wallet to confirm the transaction.
- Confirm the process using your wallet.
Please be advised that the current transaction fees should be in the range of 0.065 GWEI.
Congratulations! You have successfully withdrawn your funds from the Sovryn lending pool.
¶ How to withdraw funds from a lending pool in the alpha dapp
Note that you can also adjust loans of some assets on the newer dapp.
A user has an outstanding loan right after completing a successful lending transaction. To withdraw a loaned asset, follow the steps below. The first three steps are identical to the above depositing process (screenshots included).
¶ 1. Access the Sovryn Alpha dapp
- Go to https://alpha.sovryn.app to access the Sovryn Alpha dapp.
¶ 2. Connect your wallet
- On the right top, connect your wallet by clicking the Connect Wallet button.
If you have not already set up your wallet to connect with the Sovryn dapp, visit the Wallet Setup Guide section before proceeding further.
¶ 3. Select Finance → Lend
- From the top navigation menu, select the Finance tab and continue with the Lend option.
¶ 4. Select the asset to withdraw
- Select the withdraw button on the asset row that you would like to remove from the lending pool. The example below shows how to withdraw from the RBTC lending pool:
¶ 5. Enter the amount to withdraw
- Enter the amount you want to remove from the lending pool in the Amount field.
- Alternatively, you can click the Max button to withdraw the entire amount for the selected asset.
- Double-check your selections and click the Withdraw button at the bottom of the popup.
¶ 6. Approve & Confirm your transaction
After selecting Withdraw in the previous step, you will be prompted by your wallet to perform approval and confirmation.
- Confirm the process using your wallet.
Please be advised that the current transaction fees should be in the range of 0.065 GWEI.
Congratulations! You have successfully withdrawn your funds from the lending pool on the Sovryn platform.
¶ Lending FAQ's
¶ Why lend on Sovryn?
Lending on Sovryn allows you to earn interest on your lent asset(s). The APY is the variable % you gain annually for lending your assets and changes according to the demand and supply for lending. Interest payments made by borrowers are distributed to lenders. Lending on Sovryn is non-custodial, you are free to initiate a withdrawal at any time. With Sovryn, you do not have to entrust your holdings to a centralized custodian or a multi-sig that issues digital IOUs for your assets. You are in full control of your funds while the blockchain provides you with security.
¶ How do I earn SOV rewards by lending?
Select lending pools provide SOV reward incentives. The reward incentives are evaluated on a weekly basis with the rates being introduced, re-calibrated, or removed alongside the AMM yield-farming pools every Monday.
- The current active pools and amounts of SOV being dropped on them will be visible in the promo cards at the top of the Lending page here.
- Lenders will continuously accumulate SOV proportionate to their share of the pool, shown in the reward column.
- You can withdraw funds at any time, paying only the transaction fee.
- Lending Reward SOV will have a linear vesting period of 40 weeks.
¶ How do I lend on Sovryn?
Lending on Sovryn is quick and easy. Follow this simple step-by-step guide.
¶ How do I withdraw my funds from a lending pool?
Withdrawing from a lending pool is quick and easy. Follow this simple step-by-step guide.
¶ Disclaimer
- DISCLAIMER: Nothing on this page should be taken as investment advice. The inclusion of a third-party app or service does not constitute an endorsement of the app or service by Sovryn developers or anyone else in the Sovryn community and is provided for informational purposes only. If you have any problems with the listed third-party apps or services, please contact the maintainer of that app or service for help. Sovryn does not control your funds in any supported Web3 wallet - you are entirely responsible for your wallet security. Please do your own research and ensure you understand and accept the risks before trading or using any apps or services to store your funds.