UwU Lend
UwU Lend is a liquidity market that offers depositing and borrowing. Users earn interest on deposits and pay interest to borrow.
How it work
UwU Lend is a liquidity market that offers depositing and borrowing. Users earn interest on deposits and pay interest to borrow. This provides the ability to free capital against assets users are planning to hold for utilization in other investments, leveraging, or expenses. Outstanding loans have more collateral backing them than debt, known as overcollateralization. This eliminates risk of non-payment for depositors. The UwU treasury earns a small amount of fees to cover bad debt in the event of extreme volatility. Borrowers do not have a repayment schedule with no limit on loan duration.
Collateral Parameters
Each asset has its own parameters due to its own risk profile. High liquidity coins such as stable coins and ETH will have greater LTV. Higher LTVs allow users to borrow to a greater percentage of their value.
Liquidation thresholds are always above LTV and flag loans as acceptable to begin liquidation on if necessary. This prevents healthy loans from being liquidated for any reason.
Each asset has a liquidation fee, sometimes referred to as a bonus for liquidators. This incentivizes others to liquidate unhealthy loans from the protocol for its protection. Liquidation fees are taken from a user’s collateral. A portion of liquidation fees go to the treasury to protect against insolvency in volatile conditions.
Supply allowance may be capped for certain assets to limit UwU Lend’s exposure to bad debt in the event unhealthy loans cannot be liquidated efficiently.
| base ltv | DAI | LUSD | FRAX | MIM | wETH | wBTC | CRV | SIFU | aSPELL | wMEMO |
|---|---|---|---|---|---|---|---|---|---|---|
| base LTV | 90% | 90% | 85% | 85% | 85% | 70% | 70% | 70% | 60% | 60% |
| liquidation treshold | 95% | 95% | 90% | 90% | 90% | 75% | 75% | 75% | 65% | 65% |
| liquidation bonus | 5% | 5% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% |
UwU Token
UwU is a revenue sharing token that provides returns to staked ETH-UwU LPs. Emitted UwU tokens vest for four weeks. Tokens may be claimed at any time before they are fully vested but will incur a 50% penalty for immediate release.
LPs have a lock period of eight weeks. Users that stay staked in the protocol after the 8 weeks lock period, continue to earn yield in perpetuity until it is withdrawn.
LP Incentives
All revenue is shared with LP stakers. Yield derives from the variable interest rate borrowers pay, and penalties of UwU Token emissions due to early token claims. Stakers receive the same basket of tokens that UwU Lend supports (i.e. wBTC, wETH, DAI, MIM, etc.) Tokens begin accrual upon staking and can be claimed as often as desired without penalty.
The LP position itself has a lock period of eight weeks and may not be withdrawn early. Note that frequent claims may incur high gas fees and significantly reduce effective APY depending on stake size.
80% of protocol earnings are paid to those staked.