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How Much Interest Will I Receive?
When a lender provides liquidity into a Feeder Pool or a Master Pool they will automatically start earning interest generated by lending activities. This interest will be paid in stablecoin.
Interest is earned on an accrual, not a cash-flow basis. This means a lender will earn interest when it is earned, regardless of when the loan is repaid. This provides a fairer and more accurate reflection of the interest a lender is entitled to. For example, if a loan is repaid after 20 days, a depositor which withdraws before the loan is repaid is entitled to portion of the interest earnt from that loan.
The interest-rate a depositor receives on their deposit is dependent on the loan utilisation rate of the Master Pool (size of loans / size of deposits), and the weighted interest-rate of all loans in the Master Pool, over the time period (in seconds) in which the deposit is in a Feeder Pool or Master Pool.
The higher the weighted interest-rate of all loans in the Master Pool, and the higher the loan utilisation rate of the Master Pool the higher the interest-rate achieved by a lender. Therefore, whilst a borrower pays a fixed interest-rate, the interest-rate for lenders is variable.
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