Ribbon Finance
  • Introduction to Ribbon Finance
  • Aevo
  • FAQ
    • General
    • DOV Deposits
    • DOV Withdrawals
    • DOV Trading and options
    • Ribbonomics
  • Dune dashboards
  • Contribute
  • Security
  • Ribbon Theta Vaults
    • Introduction to Theta Vaults
      • Strike Selection and Expiry
      • Options Architecture
      • Options Settlement
      • Auctions
      • Risk profile
      • Fees
    • Theta vaults architecture
    • User guides
      • How to deposit
      • How to withdraw
      • How to pause and resume
      • How to stake, unstake vault shares and claim rewards
      • How to transfer vault positions
      • How to participate in Paradigm Auctions
      • How to redeem oTokens
  • RIBBON EARN
    • Introduction to Ribbon Earn
    • Ribbon Earn USDC
      • Risk-Free Rate
      • Twin win strategy
      • Vault specifications
      • Eligibility
      • Fees
    • Ribbon Earn stETH
      • What is a dolphin strategy?
      • Vault specifications
      • Risk profile
      • Fees
  • RIBBON LEND
    • Introduction to Ribbon Lend
      • Yields from unsecured lending
      • No lockups
        • Pool status
        • Default
      • Off-chain enforcement / credit underwriting
      • Built-in insurance
      • Fees
  • ribbon treasury
    • Introduction to Ribbon Treasury
      • Why Ribbon Treasury?
      • Partners
      • How to get involved
  • Ribbonomics
    • Overview and RBN tokenomics
      • Vote-Escrowed RBN
      • Fee Collection and Distribution
      • Liquidity Gauges and RBN Emissions
      • Gauge Weight Voting
      • Bribes
        • Guide to Boost Bribing
          • For Bribers
          • For veRBN Holders
      • Upgrades
    • How to lock RBN, boost and claim protocol revenues
  • Developers
    • Deployed Contracts
    • Ribbon Subgraph
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  1. RIBBON LEND
  2. Introduction to Ribbon Lend

Yields from unsecured lending

PreviousIntroduction to Ribbon LendNextNo lockups

Last updated 2 years ago

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The demand for leverage is at all-time-lows in DeFi. Lending USDC on Aave’s money market yields ~1% APY; lending USDC on Ribbon Lend to institutional market makers currently yields 7%-10% APY organically, plus additional RBN liquidity mining incentives. These are pre-3AC rates — major CeFi lending desks have already come back online to lend to the same market makers.

Ribbon Lend pools are permissionless, so anyone can participate. You can deposit into any available pool, based on your preferences and expectations. Therefore, you can individually choose to whom you lend your capital. Following each deposit, you will receive receipt tokens (rToken); they represent your position in a given pool and accrue that pool's interest rate on each block.

Pools interest rates are dynamic: they change according to the , or percentage of the pool's liquidity that is being used by the borrower at any particular moment, following a . Interest is accumulated for each block and it immediately raises the borrower's utilization rate. In other words, interest is immediately paid to the lenders, but from the liquidity of the pool itself. The borrower may choose the frequency and amount of each repayment, provided that the utilization rate does not exceed a specified level established by governance.

utilization rate
specific curve