Idle Liquidity Booster
When liquidity is deposited into Unlockd pools, it serves as the source of funds for borrowers accessing loans.
However, there are instances when the utilization rate is low, resulting in idle liquidity within the pools.
To maximize the potential of this idle liquidity, Unlockd has introduced the Idle Liquidity Booster. Through this program, the idle liquidity is routed towards the most secure and trusted protocols in the DeFi landscape, engaging in ultra-low-risk farming strategies via the AI-powered maxAPY protocol.
The additional yield generated from these strategies is mainly utilized to boost the yield accrued by lenders when the utilization rate is low. This ensures that lenders benefit from increased returns on their deposited funds .
Additionally, this extra yield will also be directed towards reducing the interest paid by borrowers, providing them with a cost-saving advantage when repaying their loans, when the utilization rate grows.
| Utilization Rate | Reduced Interest for Borrowers / Boosted Yield for Lenders |
|---|---|
0% | 100% | 0% |
10% | 77.78% | 22.22% |
20% | 55.56% | 44.44% |
30% | 33.34% | 66.66% |
40% | 11.12% | 88.88% |
45% (Optimal UR) | 0% | 100% |
50% | 0% | 100% |
60% | 0% | 100% |
70% | 0% | 100% |
80% | 0% | 100% |
90% | 0% | 100% |
100% | 0% | 100% |
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