Lender Yield

Lender Yield is the return on investment earned by individuals who deposit their digital assets into a lending pool. This yield is generated primarily from the interest payments made by borrowers who utilize the pool's capital.

The rate is variable and fluctuates based on the utilization ratio of the pool, which is determined by the interest rate model. When borrowing demand is high, lender yields increase to attract more liquidity; when demand is low, yields decrease.

This mechanism creates a self-balancing market that seeks to maintain an optimal supply of capital. For lenders, it represents a passive income stream that carries risks related to protocol security and market volatility.