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 APR 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. The Sovryn Protocol collects 10% of interest for the insurance fund, which exists to protect lenders in the possible case of a loan defaulting. 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.
Additionally, Sovryn enables users to provide liquidity to its automated market maker. The SOVRYN market-making protocol is made up of a series of smart contracts designed to pool liquidity and perform peer-to-contract trades in a single transaction with no counter-party. Users benefit from adding liquidity to the automated market maker in exchange for trading fees.
An amount of SOV is dropped to lenders of specific lending pools every week, 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. 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.
As usual, the Reward SOV from these types of drops will have a linear vesting period of 10 months.
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 reduce somewhat as more funds are added to the pool, or increase as funds are withdrawn from the pool. See the current APY for yourself on the charts here.
The following step-by-step guide will walk you through the process of lending on the Sovryn platform.
After selecting deposit in the previous step, you will be prompted by your wallet to perform approval and confirmation.
Your Lending History can be viewed at the bottom of the page, showing each detail of every lending activity you make.
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).
After selecting Withdraw in the previous step, you will be prompted by your wallet to perform approval and confirmation.