Lending dApp Guide
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Lending dApp Description
Lending dApp allows the user to lend their tokens to other users and receive rewards in the form of APR in the equivalent of the lent token. The tokens that users lend in the Lending dApp are used for loans in the Borrowing dApp (for more details on the functionality of this dApp, see the Borrowing dApp Guide, which will be published soon). It is also worth mentioning that the user can withdraw their tokens at any time.
The tokens available for use can be seen by clicking the Open button in the dApp — Lend window in the “dApps” section of the Platform (see the section “Getting Started with the Lending dApp”).
For the protection of the creditor, there is an indicator of the reliability degree (security) of the transaction. By default, it is 150% of the token exchange rate (for more details, see the Borrowing dApp Guide, which will be published soon). When the indicator’s value of less than 120% is reached, part of the loan can be liquidated by other users to reach a healthy loan collateral level threshold.
Terminology
- APR is the annual percentage rate that the user receives as a Reward from tokens lent to other users. This rate is subject to change if other users also add their tokens to the offer: the larger the offer of tokens in the pool, the lower the APR, and vice versa. When using the Borrowing dApp (for more details, see the Borrowing dApp Guide, which will be published soon), APR is changed in the same way.
- Profit is an indicator that reflects the Reward for participating in the offer, i.e. lending tokens to other users. This Reward is automatically accrued to the wallet connected to the Platform when the user withdraws all his/her tokens.
- Liquidity is the liquidity of a token (total number of tokens in the offer). This indicator is calculated according to the following formula:
How the Lending dApp Works
If the user has a certain amount of a particular token (e.g. ETH) and wants to participate in the offer (lend their tokens to other users), they need to add ETH to the pool formed by the users of the Platform. Then, the only thing left is to observe the APR (since it may be subject to change), which is the basis for calculating and accruing the Reward (Profit) to the user. The Reward is accrued in the token that was added to the pool (in this case, ETH).
Important! Before using the Lending dApp (and any other sections of the Platform), the user needs to make sure the wallet is connected to the Platform. Once it’s done, all buttons will become valid. MetaMask will be used in this Guide as an example.
How to use the Lending dApp?
Getting Started with the Lending dApp
In order to lend tokens to other users, the user needs to go to the “dApps” section of the Platform (Figure 1).
In this section, three different applications can be seen:
- Borrow;
- Lend;
- P2P.
In this guide, the second application only (Lend) will be covered (Figure 2).
To get started with the Lending dApp, the user needs to click on the Open button (Figure 3).
A new window, in which the tokens available for use can be seen, will open (Figure 4).
ETH token will be used as an example in this guide.
It is worth paying attention to the information that the ETH window contains (Figure 5):
- APR — the annual rate that the user receives from tokens lent to other users;
- Liquidity — The liquidity of the token (total number of tokens in the offer; see the “Terminology” section of this guide).
For example, the user has a certain amount of ETH and wants to add their assets (ETH) to the offer. After adding ETH to the offer, APR will decrease (see the section “How the Lending dApp Works”). When the next user adds their assets to the same offer, APR decreases again, and Rewards start being accrued according to the updated APR.
Adding Tokens to the Offer
To add tokens to the offer, the user needs to click on the Approve button — once you hover the cursor over this window, the button appears (Figure 6).
The ETH Lending window will open (since ETH is used as an example here). It contains the following information (Figure 7):
- Asset — the name of the token;
- Interest APR — the annual rate at the moment;
- Balance — the token amount available for use;
- Window for entering the required token amount (Figure 8).
The maximum token amount that can be used is available for viewing above the Max button or by clicking on this button (Figure 9).
Once the required token amount is entered, the user needs to click on the Lend button and confirm the action in the wallet connected to the Platform by clicking on the Confirm button (Figure 10).
After that, the process of adding the user’s tokens to the offer will begin. Status broadcasting can be observed on the Lend button (Figures 11–12).
Finally, the pop-up page with the message that will indicate that the tokens were successfully added to the offer will appear (Figure 13).
If the tokens were not added to the offer (the action was not confirmed in MetaMask), the pop-up page with an error message will appear (Figure 14).
Upon successful addition of the user’s tokens to the offer, the modified ETH window contains the following information (Figure 15):
- Balance — the user’s token amount added to the offer;
- Profit — the user’s Reward amount;
- APR; (see the “Terminology” section of this guide).
- Liquidity (see the “Terminology” section of this guide).
Possible Actions After Adding Tokens to the Offer
There are two options for further actions: to see them, the user needs to hover the cursor over the ETH window (Figure 16):
- The Unlend button allows the user to make a change to an existing offer (decrease the amount of lent tokens). When the user clicks on it, a window appears containing the following information (Figure 17):
- Asset — the name of the token;
- Interest APR — the annual rate at the moment;
- Balance — the token amount added to the offer;
- Window for entering the token amount required for withdrawal.
The maximum token amount available for withdrawal can be seen above the Max button or by clicking on this button (Figure 17).
Once the required token amount is entered, the user needs to click on the Unlend button and confirm the action in the wallet connected to the Platform by clicking on the Confirm button.
After that, the process of changing the offer will begin. Status broadcasting can be observed on the Unlend button (Figure 18–19).
When withdrawing tokens from the offer, Rewards (Profit) are automatically accrued to the user’s wallet (they are not displayed during the withdrawal, but are accrued to the balance of the wallet connected to the Platform simultaneously with the withdrawn tokens).
Important: Rewards (Profit) are accrued to the wallet in case of full token withdrawal.
Finally, the pop-up page with a message about successful offer change will appear (Figure 20).
If the offer was not changed (the action was not confirmed in MetaMask), the pop-up page with the error message will appear (Figure 21).
Upon successful offer change, the modified ETH window contains the updated information (Figure 22).
2. The Lend button (Figure 23) allows the user to make a change to an existing offer (increase the amount of lent tokens).
The procedure is the same as for the initial addition of tokens to the offer.
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