The Detailed Policy of Lending Pool Deposit
Last updated
Last updated
Users can freely deposit and withdraw distributed interest earnings at any point. In addition to interest earnings, MESH reward is additionally distributed in return for users’ contribution to liquidity supply by depositing their assets, and the total rate of return on each lending pool is the summation of deposit and MESH distribution yield.
The deposit APR (%) and MESH APR (%) of each lending pool are real-time variation values, which depend on the total deposit size of the pool, the deposit/utilization status, and the daily MESH distribution volume.
Upon initial deposit, you must complete the transaction authorization process for each token. After the process is complete, you will be able to use the deposit service.
Leverage farmers will pay 80% of the accumulated interest earnings to lenders, 20% will be set aside as reserves, and will later be used as a reserve fund for MESH Buyback & Burn program.
Interest earnings based on real-time returns are accumulated on the assets deposited (principal), and withdrawals can be made, including interest earnings accumulated so far.
MESH rewards which are distributed up to the point until the change of balance (additional deposit/withdrawal) will be automatically received in my wallet.
The borrowing APR (%) of each lending pool depends on the utilization ratio, which indicates the number of leverage farmers borrowing assets of lenders at the moment.
The higher deposit rate of return (the higher utilization ratio) as more assets are utilized in a lending pool. The deposit yield for each pool's utilization is as follows. (1) Utilization ratio(%)= (Total Borrowed/Pool Liquidity)*100 (2) Deposit APR(%) = Borrow APR∗(1−reserve Factor) * Leveraged yield farm will pay 80% of the accumulated interest earnings to a Lender, 20% will be set aside as reserves, and will later be used as a reserve fund for MESH Buyback & Burn. * reserve Factor = 0.2
On the other hand, the more assets are utilized in a lending pool, the steeper the borrowing costs that leverage farmers have to pay. As such, the mechanism of interest rate formation according to the interaction between asset utilization demand (leverage farmer) and a lender induces more deposits by providing higher returns to depositors as a lending pool asset is actively utilized. However, if it is overly active (more than 90%), a high cost is set to naturally induce a return of the assets in use. (1) Borrow APR(%) = Borrowing Rate Model*Utilization * Please refer to Borrowing rate Model of each token.
| Terms | Definition |
|---|---|
Pool Liquidity
The total number of assets deposited in lending pools expressed in dollar value, and an increase of the figure depends on yield for deposit
Total Borrowed
The total amount of assets used in a lending pool expressed in dollar value, and the figure increases with Borrow APR (%).
Total APR(%)
Expected earning rate from a pool is the sum of return from MESH distribution and return for deposit (MESH APR + Deposit APR)
Deposit APR (%)
Assets deposited by lenders are utilized as funds for leverage farmers, and interest fees paid by leverage farmers are distributed to lenders. The earnings distributed to a lender is automatically included in the quantity of my wallet deposited and can be checked in a swift manner.
MESH APR (%)
Lenders receive an amount of MESH determined by their respective deposit share ratio from the amount of daily Mesh pool distribution.
Borrow APR (%)
Assets deposited in a lending pool are utilized for leverage farm, and the leverage farmer pays the borrowing cost (interest) in return for utilizing the lending pool asset. 80% of the accumulated interest is redistributed to a lender, and 20% is used as a fund for MESH Buyback & Burn.
Withdrawable (amount)
It indicates a withdrawable amount of asset based on the current contract, which varies minute by minute with the scale of total deposit and total volume utilized.
Debt ratio(%)
The ratio of how much assets deposited in a lending pool are currently being utilized is calculated as (Total Borrowed / Pool Liquidity)*100.
Reserve for MESH buyback
20% of the interest fees paid by Leverage farmers when using a lending pool asset is raised as a Reserve Fund, which is used for MESH Buyback & Burn.
＊Afterwards, the MESH Buyback quantity generated from each lending pool is automatically aggregated to determine the daily MESH distribution quantity of the pool depending on its contribution.