Lending

Getting started with Meridian Lend is easy, simply connect your wallet to the application then select ‘Deposit’ from the Lending menu dropdown. Choose an asset, then when you are ready to deposit press the ‘Deposit’ button in the ‘Your Information’ section. You will now be able to enter the amount that you wish to deposit and submit the transaction. Once the transaction is confirmed, your funds will be securely held in the relevant smart contract and you begin earning interest. You can deposit as much or as little as you wish into Meridian Lend provided that you have the funds available to do so.

How much will I earn

When users deposit tokens on the Meridian Lend platform, they will receive oTokens. These tokens are receipt tokens that accrue interest when your funds are borrowed by other users.

By depositing on Meridian Lend you will receive a share of interest paid by borrowers. The exact yield is determined by the utilisation rate of the asset being borrowed. The higher the utilisation of a reserve the higher the yield for depositors. Each asset has its own market of supply and demand with its own APY (Annual Percentage Yield) which evolves over time. Details on the market utilisation rate, current APY and other relevant information can be found on the information page for that market.

Withdrawing Funds

You can withdraw your funds by going to the "Dashboard" section of the application and clicking “Withdraw”. Provided that you are not actively using the funds as collateral (see below), you can simply enter the amount to withdraw and submit the transaction. In order for withdrawals to be successful, there needs to be sufficient liquidity in the pool that is not currently being borrowed. In the unlikely event that the liquidity is low, then you will need to wait for more liquidity from either depositors or borrowers repaying. The protocol automatically tries to maintain appropriate liquidity levels by adjusting the lending and borrowing interest rates. In this way, when liquidity is low, the interest paid to lenders will increase in order to encourage new investment. Similarly, borrowers will need to pay a much higher rate for borrowing from that pool which in turn will reduce borrowing and increase liquidity in the pool.

Using my funds as collateral

In order to borrow funds through the Meridian Lend protocol all users need to provide collateral as security for the tokens that they wish to borrow. This collateral is held by the platform to provide confidence to lenders that the loan being made can be repaid. When you deposit funds to Meridian Lend the funds are automatically available to you as collateral against a future loan that you may wish to take out. You are able to opt-out of this at any time by toggling the "use as collateral" button. This simply means that you would not be able to use that specific asset as security against a future loan.

You can withdraw your assets without opting out of using them as collateral, as long as those funds are not actively being used to borrow as the withdrawal would cause a liquidation on your loans.