What this is
Lend lets you deposit the chain’s collateral token into an ERC4626 pool and earn interest paid by borrowers. Varla’s pool is a single-asset vault: on Polygon (Polymarket) the asset is USDC, and on BSC (Opinion) it’s USDT.Polygon (Polymarket): USDC
BSC (Opinion): USDT
BSC (Opinion): USDT
How it works (high level)
Interest accrues to lenders
Borrower interest accrues via the pool’s accounting; after the reserve fee, the remaining interest increases share price.
How yield is generated
Borrowers pay interest. The pool accrues that interest using a global borrow index, and a portion of interest is collected as protocol reserve (first-loss coverage). The ERC4626 share price (assets per share) rises when borrower interest accrues.Interest rates
Varla uses a kinked utilization-based interest rate model. Rates are dynamic and vary with how much of the pool is borrowed.How the model works
- Below optimal utilization (80%): Rates increase gradually with utilization
- Above optimal utilization: Rates increase sharply to incentivize repayments
Default parameters
| Parameter | Value | Meaning |
|---|---|---|
| Optimal utilization | 80% | Kink point in the rate curve |
| Base rate | 2% APR | Rate when utilization is 0% |
| Slope 1 | 7.5% | Rate increase below optimal |
| Slope 2 | 100% | Rate increase above optimal |
Interest rate parameters (optimal utilization, base rate, slopes) are governance-configurable. The 10% reserve fee is a hardcoded constant.
Example rates
| Utilization | Approximate Borrow Rate |
|---|---|
| 50% | ~6.7% APR |
| 80% | ~9.5% APR |
| 90% | ~59.5% APR |
What you earn (and what you don’t)
You earn
You earn a pro-rata share of net borrower interest (after the reserve fee).You do not automatically get
You do not automatically get guaranteed liquidity (if funds are borrowed out, withdrawals are limited), and you do not get a fixed rate (rates vary with utilization).Key rules
Withdrawals are liquidity-limited
Even if your ERC4626 shares are “worth” a certain amount, you can only withdraw what is actually available.maxWithdraw(owner) and maxRedeem(owner) reflect current available liquidity, and available liquidity excludes the protocol reserve.
Reserve fee
The pool charges a 10% reserve fee on borrower interest. This reserve is used as first-loss coverage for bad debt and is excluded from LP withdrawals.Pool caps
The pool can be configured with global caps.depositCap limits total pool TVL (set to 0 for uncapped) and borrowCap limits total outstanding borrows (set to 0 for uncapped). These are governance/risk controls and may differ per chain.
Chain differences
On Polygon (Polymarket) the deposit token is USDC. On BSC (Opinion) the deposit token is USDT.Practical tips
If you need guaranteed liquidity, don’t assume you can withdraw instantly at high utilization. For UI, usemaxWithdraw/maxRedeem (or SDK views.readLenderSnapshot) rather than displaying convertToAssets(shares) as “withdrawable”.