Lending

When you lend, you deposit an asset into one reserve of one market. You earn interest for as long as your deposit stays there, and you carry that reserve's default risk. For the steps in the app, see Get started.

How you earn

Your deposit is recorded as b-tokens. Their price, b_rate, rises as borrowers pay interest, so your balance grows without any claim step:

your claim = b_tokens x b_rate

Lenders receive all the interest paid in their reserve. Precept takes no protocol fee, and the backstop's share is zero. The borrow rate follows the reserve's interest curve, and the rate lenders earn is lower than the rate borrowers pay whenever part of the reserve is not lent out.

What you can lose

If a borrower's collateral runs out before their debt is repaid, the remainder is written off against the lenders of that reserve by lowering b_rate. Everyone in the reserve loses the same percentage, and other reserves are not affected.

Nothing stands in front of that loss. There is no insurance fund, junior tranche or treasury to cover it. Risks covers this in full.

Withdrawing

You can withdraw while the reserve has unborrowed cash. Three things can stop you or reduce what you get:

  • High utilization. If most of the reserve is lent out, there may not be enough cash until borrowers repay or new lenders deposit. Rising rates encourage both.
  • Your own debt. If you also owe debt in the reserve, a withdrawal needs a health check, and that needs a fresh price.
  • A loss being recognised. Lenders with no debt in the reserve can still withdraw at full value until a loss is written off, so anyone who leaves earlier takes none of it. See Lending economics.

A pool's status does not trap lenders: withdrawals keep working even after an admin freeze.

Before you deposit

  1. Compare the pool address with Official markets.
  2. Look at what collateral backs your loan. As a USDC lender, you are exposed to the collateral asset and its price feed.
  3. Check the utilization, because it decides both your rate and how quickly you can exit.

Never send tokens straight to a pool contract. Direct transfers are not credited to anyone and cannot be recovered.