Echelon
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  • Group 1
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Supply Rates

Details on how Supply Rates are determined

Supply Rates on Echelon

Echelon’s supply rate is derived from borrower interest payments, ensuring that lenders earn a proportional share of the yield generated from borrowing activity. A portion of this yield is allocated to the protocol’s liquidity reserves through the Reserve Factor, while the remainder is distributed to suppliers. This mechanism sustains protocol liquidity while incentivizing lenders to contribute assets.

How Supply Rates Are Determined

The Supply Annual Percentage Yield (APY) is influenced by several key factors:

  1. Utilization Ratio – The proportion of supplied assets that are actively lent out.

    • Higher utilization increases supply rates, as more interest is paid by borrowers.

    • Lower utilization results in lower supply rates due to reduced borrower demand.

  2. Variable Interest Rate – The dynamic interest rate applied to loans, which adjusts based on market conditions and asset utilization.

  3. Reserve Factor – A percentage of borrower interest that is redirected to the protocol’s liquidity reserve, reducing the total yield distributed to suppliers.

Additionally, supply rates may be subsidized by token incentives, which vary on a pool-by-pool basis to enhance lender returns.

Viewing Supply Rates

The most up-to-date Supply APY for each asset is displayed on the Core Markets interface. Users can check live rates and pool-specific incentives to optimize their lending strategy.

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Last updated 15 days ago