Lending Pools
How can you earn yield on Asgard?
Earning yield on your assets is very similar to lending to Marginfi, Kamino.
Due to the Credit Account architecture -> your assets never end up in custody of the borrower. They are held on an isolated on-chain program after they are borrowed.
Where is the yield coming from?
It can come from multiple sources:
Borrowers paying interest:
The assets you lent will be utilized by the borrower to power their Credit Account. In return they will be required by the protocol to pay interest.
Borrowers pay rates according to utilization curves.
More utilization -> Higher the rate.
This is similar to lending protocols on Solana like Marginfi, Kamino.
Token incentives for lending assets to Asgard.
Can come from protocols who want to incentivize lending activity on Asgard for their token.
Asgard can run $GUARD incentives to accelerate flywheel.
How does Asgard ensure that I get my assets back if the borrower defaults?
The borrower cannot default since recourse action is built inside the Credit Account.
As mentioned above, the credit that is drawn by the borrower stays inside the Credit Account.
As soon as the net equity value of the Credit Account gets closer to 0, the Credit Account will be liquidated. before the assets of lenders start getting exposed to the downside.
The key difference from Overcollateralized Credit protocols like Marginfi, Kamino is that in Asgard - the protocol - has control over borrower's purchased assets.
Since whatever the borrower does with the credit line stays inside the Credit Account -> the protocol has full control to liquidate the purchased assets to prevent bad debt situation.
Last updated