Lending
Composable Leverage on PulseChain
Passive Lending
How Lending Works
Passive lending forms the backbone of GLOW's leverage system, providing the capital that borrowers use to amplify their positions. Unlike traditional DeFi lending where you're exposed to various risks, GLOW's lending pools offer a remarkably clean and straightforward value proposition.
Capital providers deposit single assets into dedicated lending pools, immediately beginning to earn yield from borrower interest payments. The beauty of this system lies in its simplicity and flexibility - you maintain complete control over your capital while earning competitive returns.
Key Benefits:
Zero deposit/withdrawal fees - Keep 100% of your yields
No lock-up periods - Withdraw whenever liquidity allows
No impermanent loss risk - Single asset exposure only
Automatic interest compounding - Earnings grow without manual intervention
Battle-tested mechanics - Based on proven lending protocols
Dynamic Interest Rate Model
Pool profitability operates on a simple supply and demand principle: higher utilization from borrowers drives higher yields for lenders. This creates natural market equilibria where attractive yields draw more lenders during high-demand periods, while lower rates during quiet periods maintain sustainable borrowing costs.
The protocol implements linear extrapolation for interest rate calculations, following Aave's proven approach. This model ensures predictable rate changes and prevents sudden spikes that could destabilize positions. As utilization increases, rates rise gradually, providing early signals to both lenders and borrowers about market conditions.
Receipt Token
When you supply assets to any lending pool, you receive Receipt Tokens (nWPLS, nETH, nHEX, etc.) that represent your proportional ownership of that pool. These tokens are far more than simple IOUs - they're sophisticated financial instruments that automatically compound your earnings.
Technical Features:
ERC-4626 compliant for maximum DeFi compatibility and composability
Auto-compounding mechanics - Interest automatically reinvests without gas costs
Value appreciation model - Your tokens become worth more underlying assets over time
Transferable assets - Use Receipt Tokens across other DeFi protocols
Enhanced Compound mechanics - Similar to cTokens but with modern improvements
How Compounding Works: Unlike protocols that increase your token quantity, Receipt Tokens appreciate in value. Your 100 Receipt Tokens don't become 105 tokens - instead, they become redeemable for more of the underlying asset. This approach simplifies accounting and reduces gas costs while providing the same compounding benefits.
Liquidity Management
Withdrawal Availability: During high utilization periods, withdrawals may be temporarily limited to ensure borrowed capital remains available for active leveraged positions. This is a feature, not a bug - it ensures that the protocol can honor its commitments to borrowers while protecting lender capital.
When utilization is high, it typically means borrowers are paying premium rates, which translates to higher yields for lenders. The temporary withdrawal restrictions during these periods are offset by the enhanced earnings, creating a balanced system that benefits all participants.
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