DeFi Lending on Waves: the Power of Vires.Finance Liquidity Pools
Waves is a sprawling ecosystem of multiple blockchain-based products that solve various tasks and provide DeFi earning opportunities to users. Today, we would like to spotlight Vires.Finance, which is a pool-based liquidity protocol facilitating lending and borrowing capabilities at rates defined by the market equilibrium. In this article, we describe how Vires liquidity pools work and how to use them.
On Vires.Finance, you can supply assets to get passive income and borrow other assets using your supplied assets as collateral. Vires.Finance contains pools of stablecoins: USDN, EURN, USDT, USDC, as well as pools of volatile assets: BTC, ETH, WAVES.
The interest rate of supplying and borrowing in each pool depends on its utilization, that is, the ratio of borrowed and supplied amount. The more the utilization, the higher the rate is. The interest is compounded and the interest rate is updated by each transaction in the pool.
Suppliers’ income
When you invest assets to Vires pools, you get income from multiple sources:
- Interest on loans paid by borrowers. The interest increases your deposit with every block appearing on the blockchain (~1 minute).
- Staking rewards: not-lent WAVES, USDN, and EURN are staked, and staking payouts also increase your deposit.
- Special incentive in VIRES governance token distributed on a per-block basis.
Get familiar with rates information in the Markets section. Click on the asset name to find out detailed information about the pool.
Keep in mind that there is no impermanent loss in Vires pools because each of them contains a single asset.
Borrowing
By borrowing, you can obtain the assets you need without selling the assets you want to hold. Your borrow limit depends on the value of your supplied assets with the “Use as collateral” option enabled, adjusted by the Collateral Factor of the supplied asset.
Keep a close eye on your account health: the proportion between your borrow limit and your actual loan. If the account health reaches 0%, liquidators can acquire a part of your deposit and repay a part of your loan to earn the liquidation penalty. Your account health may decrease due to price volatility and accrued borrowing interest; if you make new borrowings, or withdraw collateral assets, or disable collateral, your account health is reduced as well. To avoid liquidation, maintain your account health at a safe level of ~20%, repay your loans or deposit more collateral assets when necessary.
As a borrower, you are entitled to VIRES token: the pool’s VIRES reward is split between suppliers and borrowers with a 50:50 ratio for stablecoins and 95:5 for volatile assets.
How to supply assets
Step 1. Connect wallet
Vires.Finance is based on the Waves blockchain, which offers instant transactions with fixed low fees. To start using the service, first, connect your Waves wallet:
If you don’t have a Waves wallet yet, we recommend creating an Email wallet. You can use it in different browsers and on different devices without having to import your seed every time. If you forget your password, you can quickly restore access to your wallet using your email.
To create an Email wallet, select Waves.Exchange Email, then click Sign Up.
Step 2. Top up your wallet
You can deposit assets to Vires.Finance from your Waves wallet only. To transfer assets from other platforms, click Blockchain Bridge and follow the on-screen instructions.
Step 3. Supply your asset
Scroll to the Markets section and click Supply next to your asset. Enter the amount or click Max to specify the amount you have in the wallet. If you want to borrow assets later, make sure the Use as collateral option is enabled.
💡 You can select an asset to pay a transaction fee. However, in most cases it’s much cheaper to pay the fee in WAVES. If you have no WAVES, swap some small amount of your asset for WAVES on swop.fi or waves.exchange.
After your transaction is confirmed, you start earning profits immediately.
How to borrow assets
Scroll to the Markets section and click Borrow next to the asset you want to borrow. Enter the amount or click Max Safe to specify the amount that would keep your account health above 20%. Click Borrow and confirm the transaction.
The amount you need to repay increases every minute due to interest on the loan. You can repay your debt at any time. To repay, click on the asset name in the My Borrow section.
Follow Vires.Finance on social media for the latest updates:
