One of the major upgrades of Zethyr Finance 2 is now you can deposit your idle TRON tokens to Zethyr Finance lending pools to maximise your yields. The process is easy, just like how you deposit your collaterals.
At the beginning, Zethyr will open lending pools to TRX, USDT, WIN and BTT. If you have used Zethyr Finance 1, you will have the option to migrate your collaterals from Zethyr Finance 1 to Zethyr Finance 2.0 lending pools.
To maximise yields for depositors, Zethyr will combine the following strategies:
- Lending to other Zethyrians who need to borrow
- Staking at dapps to earn staking rewards
- Depositing to other financial protocols to earn rewards
For Zethyr Finance lending pools, only extremely low risk strategies will be used to ensure the safety of depositors’ capital.
One important question that you may ask is how we determine the borrowing and lending rate. To answer that question, we need to introduce the concept of utilisation rate which is
Of course, the maximum value of utilisation rate is 1 or 100%.
Borrowing interest rate is therefore
In which rf is the quasi-risk-free rate that we can get from staking at dapps or other financial protocols.
While depositing idle tokens to other protocols helps to increase return to lenders, it may reduce the available liquidity for Zethyr borrowers that require instant credit lines and for Zethyr lenders that require instant withdrawals. However, leaving too much idle decreases lenders’ returns. A trade-off must therefore be made. At the beginning, Zethyr will leave 5% of the total supply idle at all time to facilitate flash loans and withdrawals. The percentage may change when appropriate.
Therefore, the return rate to depositors is
Okay, I guess that’s enough maths for today. We will introduce more of Zethyr Finance in next week’s blog.
If you have any questions or feedback, please let us know in our Zethyr telegram.
Stay tuned to know what will be coming in Zethyr Finance 2.0