Lending

Introduction

Lending an asset is an easiest way to interact with the Levva protocol. Levva alleviates all the complexity associated with decision making when lending liquidity, lowering entry barriers and making liquidity provision a truly enjoyable experience.

Lending

Lenders may interact directly with the lending pools if they know exactly the use-case they're willing to provide a liquidity for. Alternatively, lenders may put their liquidity into special-purpose vaults (vault smart contracts inherit ERC-4626 standard logic) and have vaults do the liquidity management work for them.

For the MVP version of the Levva protocol there will be a single vault for each lending asset class. So expect to have at least 3 vaults with the launch: WETH, USDC, and USDT based vaults.

Ultimately, Levva team designed its vaults to be managed by professional "money managers" who can pick vault allocations, define vault strategies, and control vault parameters on behalf of the vault depositors (liquidity providers).

Native yield

Levva integrates its vaults with the Etherfi restaking protocol and the Aave lending protocol to offer native yield for vault liquidity providers. Lenders benefit from default yield on stablecoin liquidity deposited into Aave, as well as staking yield on ETH restaked via Etherfi pools. The entire process is abstracted from liquidity providers, making it appear as if they are operating with WETH, USDC, USDT, or other stablecoins by default.

To facilitate and accelerate withdrawals when converting yield-bearing tokens from the above protocols back into lender liquidity, Levva organises secondary liquidity in the form of Balancer AMM pools. These pools use vault LP tokens against underlying vault assets with predefined liquidity ratios.

High efficiency lending

Initially, Levva vaults will provide liquidity automatically depending on the borrower demand. Such a setup allows to naturally capture the highest yield opportunities on the market, as rational borrower demand will always strive to utilize liquidity in the most effective manner, driving it to Levva pools with highest yield opportunities, which in turn translate into higher interest return for lenders.