Opening stablecoins to volatile assets' yield

While lending & borrowing are integral to DeFi, there are still risks when collateralizing your assets. Please do your due dilligence & deposit accordingly.

What is SphereLend?

SphereLend is Sphere's in-house lending market. Using SphereLend, lenders can deposit stablecoins & gain access to yields from volatile assets such as $ETH or $MATIC. Borrowers on the other hand can leverage their position at 0 interest.

How does SphereLend work?

For lenders it is very simple. A lender can supply the money market a variety of stablecoins. When a borrower leverages, they deposit volatile assets as collateral.

While the position is open, the assets are farmed with & earn yield shared between Sphere & lenders. On top of that, liquidations & redemption fees are shared.

Why lend stablecoins on SphereLend?

Because lenders are given the opportunity to be exposed to volatile asset yield, which is more rewarding in most cases.

Let's take a practical example:

  • Assume there is $10m in $WMATIC used as collateral on SphereLend to borrow $7m worth of stablecoins

  • While the collateral is in SphereLend's vaults, they're deposited in Tetu's $wMATIC farm earning ~8% yield

  • After 20% protocol fees, lenders will have $640k in yield distributed equating to ~9.1% APR on a stablecoin deposit

While this is a practical example that doesn't take into account real-life performance, it is easy to see why gaining access to collateral farming benefits lenders greatly.

Why borrow on SphereLend?

SphereLend allows borrowers up to 10x leverage at 70% LTV, which allows users a variety of opportunities when using their portfolio.

Let's take a practical example:

  • Assume you have $1000 worth of $WMATIC. You are bullish on $WMATIC but don't want to sell it.

  • Instead of selling your $WMATIC, you can deposit it into SphereLend & use up to 70% of your $WMATIC's value in stablecoins @ 0% interest.

  • After you are done yield-farming, further lending, buying other tokens, you can simply pay back your loan (+ redemption fees) to gain back your collateral.

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