Lend

Learn how to earn predictable yield by providing USDT liquidity on Libre's decentralized lending platform.

Overview

Libre offers a secure way to earn predictable yield by providing USDT liquidity to the platform. All loans are 200%+ collateralized by Bitcoin, ensuring transparency and minimizing risk. Unlike traditional lending platforms, Libre's decentralized system ensures your funds are not exposed to speculative risks, trading, derivatives, or third-party lending.

How Lending Works

Step 1: Choose a Lending Pool

1. Connect your wallet to the Libre platform at defi.libre.org/lend

2. Review the available lending pools with different terms and rates:

   • 30-day pool: 8% APY

   • 90-day pool: 9% APY

   • 365-day pool: 12% APY

   • Custom pools created by the community

Each pool has different durations and interest rates, allowing you to choose based on your liquidity preferences.

Step 2: Deposit USDT

1. Select the amount of USDT you wish to lend

2. Review the expected yield based on the pool's current APY

3. Confirm the transaction to deposit your USDT into the lending pool - you will receive "TP" tokens (Tether Pool) that you can redeem for USDT at any time - or sell to another Libre account

Your USDT is now available for borrowers to take loans against their Bitcoin collateral.

Step 3: Earn Interest

Interest accrues based on the utilization of your deposited USDT:

• When borrowers take loans using your provided liquidity, you earn interest

• Interest rates are fixed for the duration of each loan

• Your earnings are calculated and displayed in real-time on the platform

Step 4: Withdraw Funds

Depending on the pool you've chosen:

1. For open-ended pools: Redeem your LP to withdraw your USDT plus earned interest at any time, subject to liquidity availability

2. For fixed-term pools: Redeem your LP to withdraw your USDT plus earned interest after the term expires

Security of Funds

All loans on Libre are secured by Bitcoin collateral with built-in safety mechanisms:

• Overcollateralization: Loans require Bitcoin collateral valued higher than the borrowed amount

• Liquidation process: If a borrower's Loan-to-Value (LTV) ratio reaches 80%, they have 72 hours to add more collateral or reduce their loan before liquidation

• Smart contract automation: Liquidations are handled programmatically by smart contracts, not by centralized entities

• Transparent system: All collateral can be audited on-chain at any time

Benefits of Lending on Libre

• Predictable yield: Fixed interest rates provide certainty about your returns

• Bitcoin-backed security: All loans are collateralized by Bitcoin

• No speculative risks: Your funds are not exposed to trading or derivatives

• Full transparency: Monitor collateral and utilization in real-time

• No intermediaries: Interact directly with the protocol through smart contracts

• Flexible options: Choose from multiple lending pools with different durations and rates

libreDEX Integration

The libreDEX plays a crucial role in the lending ecosystem:

• Used by the loan liquidation engine to wrap and trade Bitcoin during liquidations

• Creates opportunities for traders to buy liquidated assets at 1% below market rate

• Provides market liquidity that supports the overall lending platform

Risk Considerations

While Libre is designed to minimize risk, lenders should be aware of:

1. Utilization risk: Your yield depends on borrower demand for loans

2. Smart contract risk: Although audited, all DeFi platforms carry some level of smart contract risk

3. Market volatility: Extreme Bitcoin price movements could affect the liquidation process

FAQ

Q: Is there a minimum amount required to lend? A: There is no minimum amount required to lend on Libre. You can provide as little or as much USDT as you wish.

Q: How is my yield calculated? A: Your yield is calculated based on the fixed interest rate of the pool you choose and the utilization of your deposited funds.

Q: What happens if no one borrows my USDT? A: You only earn interest when your USDT is borrowed. If utilization is low, your effective yield may be lower than the advertised APY.

Q: Can I withdraw early from a fixed-term pool? A: You can queue up a redemption from the pool any time - loans and extensions from that pool will stop until you are able to get your capital out. Additionally, you can trade your position without redeeming since the TP tokens you receive as a ticket against your deposit are completely transferrable.

Q: How does Libre ensure the safety of my funds? A: Libre ensures safety through overcollateralization, transparent liquidation processes, and smart contract automation. All loans are backed by Bitcoin collateral that can be audited at any time.