How do you start lending on Yield Credit?
Glad you asked. In this tutorial, I will show you how to request a loan or how to borrow from the list of pending offers.
Let's get into it 👇
How To Start Lending on Yield Credit
To access the platform, simply head over to https://app.yield.credit/, and you will be greeted with the following screen;
As we want to lend today, simply hit lend on the top to bring up the following screen. This will show all currently available loans that are being offered;
At this point, we have two options to lend out our cryptocurrency. Option A is to select one of the borrowing requests already on offer. Or Option B is to create a new lending offer on your own terms.
As Yield Credit is relatively new, you might not see any offers on this screen. Do not worry about this as you always have Option B - to set up your own lending offer for other borrowers to fill.
Option A - Filling A Borrowing Request On Offer
When you first hit lend, you are automatically presented with the entire selection of loans that different borrowers have put on offer for lenders to fill;
You can easily see all of the borrowing requests available that borrowers have put up for you to fill by lending. Let’s take a closer look at the highlighted loan offer as an example;
- Box 1 - This shows the total loan amount that the borrower has requested. In this case, the borrower has requested to borrow 0.55 WETH, worth around $1,008.
- Box 2 - This shows the amount of interest you will be paid for filling this loan request. In this example, we will receive 2% of the total principal - worth around $20.16.
- Box 3 - This shows the total collateral that the borrower has put up to secure the loan. In this case, the borrower has deposited 2,180 AMPL, worth around $2,217. If the borrower defaults on the loan that we provide, we will receive this collateral.
To gather more details on the loan, simply click the loan of interest to bring up the following screen;
This screen shows us more details about the loan that was requested by the borrower.
- Box 1 - This shows us the interest that we will earn for filling this loan. In this case, we will earn 2% for lending.
- Box 2 - This shows us the principal currency and amount that the borrower requested. In this loan, the borrower has requested 0.55 WETH, worth around $1,008.
- Box 3 - This shows us the duration of the loan. In this case, the borrower will have to repay the loan within 20 days.
- Box 4 - This shows us the collateral the borrower has put up. For this loan, the borrower has put up 2,180 AMPL - worth around $2,217 at a 220% ratio. It also shows the liquidation price at which point the borrower will have defaulted - in this case, it is at $0.69.
- Box 5 - Shows the reward that the borrower will earn for repaying the loan on time. In this example, the borrower will earn 0.1 YLD, worth around $12.53. Remember, only borrowers are rewarded in YLD for repaying their loans on time. Lenders earn the interest.
- Box 6 - If you are happy with the terms of the borrow request, you can go ahead and click “Lend” to fulfill the loan and send the principal amount.
If you are happy to lend your cryptocurrency with the highlighted criteria, go ahead and click “LEND” to bring up the following screen;
This is a confirmation that you are happy to fulfill the loan request. It is important to note the platform fee in this step. Although the image says it is 0.00 WETH there is a small fee involved. It is 7.5% of the interest. In this case, the interest is 2% of 0.55 WETH - which is 0.011 WETH. 7.5% of 0.011 WETH is 0.000825 WETH - that is the fee that will be paid to the platform.
NOTE: 100% fees paid to the platform are used to buy YLD and burn.
If you are happy to fulfill the loan, simply hit the checkmark box. This will bring up a separate MetaMask screen asking for your permission to allow the Yield Credit platform to utilize your WETH;
There is a small Ethereum blockchain transaction fee for this step. In this example, the fee is $8.27. If you are happy to go ahead with it, hit confirm.
Once that transaction has been mined, another MetaMask window will pop up;
As we are interacting directly with the smart contract for the loan here, the transaction fee will be quite steep. In this case, the fee was $160. Eventually, Yield Credit will be launching on the Fantom Network which should significantly help to reduce these fees.
If you are happy with paying the current transaction fee, go ahead and hit confirm.
Once the transaction has been mined, you will be redirected to the profile page where you will see the loan you have filled;
You can click the loan to pull up further details about the loan you provided;
This page will show you how many days are left for the loan to be repaid. It will also show you how much you can be expecting as a repayment - in this case, we can expect 0.56 WETH. Lastly, it shows you the status of the loan so far. As you can see, we are still waiting for the borrower to make the repayment.
If there are no loan requests on the lend screen, do not worry, you can choose option B and set up a loan request yourself.
Option B - Set Up A New Lending Offer
Setting up a new lending offer is relatively straightforward. First, click the “+” icon to bring up the lending offer screen;
This will bring up the following screen;
Hare, we can set the terms of the loan according to our own preferences;
- Box 1 - This allows us to set the principal amount that we are willing to lend. The minimum loan on the platform is currently set at $1000 worth of any of the integrated tokens. In this example, I have set the principal to 2.5 WETH, worth around $4,454.
- Box 2 - This shows us the amount of YLD that the borrower will be rewarded for repaying the loan on time. In this example, the borrower would earn 1.78 YLD for repaying on time.
- Box 3 - This allows us to set the interest we would like to receive for providing the loan. The interest can be anything between 2% and 12.5%. In this case, I have set the interest at 5%.
- Box 4 - This allows us to set the duration of the loan. It can be anything from 10 days to 60 days. In this example, I set it at 10 days - meaning the borrower would have to return the 2.5 WETH lent (+ interest) within 10 days from taking the loan.
- Box 5 - If you are happy with the set criteria of the loan, go ahead and click create to publish the loan on the platform.
Once the loan has successfully been submitted, you will see it on the ‘borrow; tab on the platform;
Your lending request is now ready for borrowers to utilize. Once a borrower has taken the loan, you will see it on your profile page.