Lending and Borrowing

Lending

Activation

Once connected, lenders can make deposits into different market liquidity pools.

Click on the "Lend" tab on the left side menu, (or use the hamburger menu on mobile) to access a list of available markets. Alkemi Earn currently supports DAI, WBTC, WETH and USDC markets in the KYC / AML permissioned Verified pool. ETH, WBTC and USDC are the supported markets in the permissionless Open pool.

Deposit into the desired market by first pressing "Enable" (shown below) to activate each separate market. Activation will incur a transaction fee payable in Ethereum and will require wallet confirmation to be processed.

Deposits

Upon market activation, users can deposit their requisite wallet balance into the selected market.

Click on the "Deposit" button as displayed below.

This will open up a deposit form on the right of the page.

1. Enter the amount to deposit.

2. Click the "Deposit" button.

3. "Confirm" the transaction using the wallet.

Interest will begin to accrue as soon as the transaction is processed.

Users can monitor interest accrued within the Lending tab and from the Dashboard. Interest rates are defined as APY (Annual Percentage Yield), detailed in green. APY calculation is determined in the Rates and Fees section of this guide.

Withdrawals

Deposits can be withdrawn at any time*:

1. Click the "Withdraw" button in the "Active Deposit" window from within the Lend tab.

2. Enter an amount to withdraw in the window (up to "Max").

3. Confirm by clicking the form's "Withdraw" button.

This transaction will require confirmation and the time taken may fluctuate depending upon Ethereum network congestion.

Deposits may be used as collateral to borrow other currencies on the platform. Collateral will be locked upon borrowing and users will be required to pay back any borrowed currencies to unlock and withdraw the initial deposits used as collateral. There are a number of variables associated with borrowing transactions, including the user's collateral ratio. Please see the Borrowing section below and the Rates and Fees page for more information.

Interest

The interest rate accrued will be paid as each block is processed on the Ethereum blockchain. Interest rates will vary at block level depending upon the supply and demand for each currency. See Rates and Fees for more details on interest.

Borrowing

Getting Started

Users can borrow currencies by following these steps:

1. Deposit a currency (i.e. ETH).

2. Access the "Borrow" tab and click the "Borrow" button in the desired market (i.e. DAI).

3. Complete the Borrow form, specifying the amount to borrow.

4. Approve and sign the associated wallet transaction.

There may be a short delay whilst the transaction is processed, depending upon Ethereum network congestion. Please note that borrowing also incurs origination fees amounting to 0.1% of the borrow size. This amount is added to the balance owed.

Interest

The amount of interest payable for borrowers is displayed in red as "APY" on each market. This will fluctuate over time according to exchange rates between the currencies borrowed and currencies used as collateral. These fluctuations may require an increase in deposits to meet collateralization ratios, otherwise users may be required to repay any outstanding loan or face a liquidation event. More information can be found below.

Collateral

Borrowing on Earn is facilitated by depositing a different currency as 'collateral' that can be 'borrowed against'. Assets can earn interest whilst deposited in the protocol and deposits can simultaneously be used as collateral to borrow other currencies. However, users cannot withdraw any collateral locked against currencies borrowed and will be required to pay back any borrowings to unlock collateral for withdrawal.

Borrowing is a function of the collateralization ratio, the exchange rate between the collateral and the asset being borrowed, and the amount of a currency available to borrow. Details on the collateral factors for each asset are included in the section on in the Rates and Fees section.

Repayment

Users may partially or fully repay loans using the "Repay" button. Once confirmed, the account’s collateral can be entirely redeemed or transferred.