¶ Lending on Sovryn
Sovryn is a decentralized finance platform that requires no permissions and will never take custody of your coins. Instead, it offers core features that can elevate decentralized finance for Bitcoin to a whole new level. Sovryn allows you to earn a passive income through lending, as you are accruing interest on your funds. A benefit from lending is that you enjoy profits, but you are less affected by the wider market performances and fluctuations. Lending is also interesting when you are holding assets long-term, as you can earn interest along the way.
In the Lend section of Sovryn’s trading platform, you can lend your assets directly to borrowers or to margin traders. The Interest APY is the % you can expect to gain annually for lending your assets and will change according to the demand and supply for lending. Interest payments made by borrowers are distributed to lenders in the asset lent. Keep in mind, this is entirely non-custodial and you are free to initiate a withdrawal at any time. This is the most faithful platform for lending without having 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. Ordinarily, there should not be a situation where the withdrawal amount is less than originally lent out, the system will make interest rates progressively higher to discourage borrowing and encourage lending when there is not enough liquidity to provide full withdrawals. So you would expect, under normal situations, to always be able to withdraw. However, when there is abnormally low liquidity, the withdrawal amount may be less than initially provided for a short period of time. This results in the lender not wanting to withdraw and ‘lose’ funds during that period. Therefore, the system will raise interest rates to reward the lender significantly. The system dynamically adjusts to reward lenders for the cost and risk of illiquidity.
Lending APY%
- The Lend APY is the Annual Percentage Yield (interest) you will receive for lending the selected asset.
- Sovryn lending is entirely a non-custodial arrangement with no prepayment penalties, so you are free to fully redeem the lent asset at any time.
- The APY is variable according to the demand and supply for lending on the Sovryn platform.
- Interest payments made by borrowers are distributed to lenders in the same asset that was lent.
¶ SOV rewards on lending pools
SOV rewards are sometimes paid to lenders of specific lending pools, with the rates being introduced, re-calibrated, or removed along with the AMM yield-farming pools every Monday.
The current active pools and amounts of SOV rewards will be visible in the promo cards at the top of the Lending page here. For example, the first XUSD loot drop rate was 15k SOV/week:
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.
Rewards are paid in SOV, the governance token of Sovryn. When you withdraw any amount from the pool or claim your rewards, your accumulated reward SOV is then locked in a 40-week vesting contract with your wallet address as the owner. Every four weeks, 10% of the original locked SOV is vested and becomes unlocked and available for you to withdraw.
The Yield & APY calculations released with each pool are variable extrapolations of the current return rate at the time of launch or announcement. These rates can fall as more funds are added to the pool or rise as funds are withdrawn from the pool. See the current APY for yourself on the charts here.
¶ How to lend
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 funds from a lending pool
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.