Comment on page
Supplying On Hatom
as of 17/06/2023
Lending is the process of supplying tokens to a pool. In exchange for giving liquidity to this pool, users will gain interest in the tokens they have deposited.
Lenders can withdraw their supplied tokens at any time (as long as they aren’t being used as collateral to borrow tokens and not all the tokens are being borrowed). There is no withdrawal fine or time lock.
Go to the supplying section on the «App» and select the asset you want to deposit. Choose the amount you wish to deposit and confirm your transaction. Once the transaction is approved, your deposit will be successfully registered, and you will receive a receipt token called HToken that accrues interest following the APY of its respective money market.
The returns will also be increased with the additional rewards, made possible by the incentive strategies put in place by the Hatom team.
HTokens holders receive earnings that evolve following the market conditions based on the interest rate paid on loans - suppliers share the interests paid by borrowers corresponding to the average borrow rate times the utilization rate. The higher the reserve utilization, the higher the yield for suppliers.
There is no minimum or maximum amount to deposit, which means you can deposit any amount you want. Keep in mind that even though the MultiversX network has low fees compared to other networks, for really low amounts, the transaction fee of the process might be higher than the expected earnings. It is recommended that you consider this when depositing very low amounts.
There should be enough liquidity (not borrowed) to be able to withdraw. If there isn’t enough liquidity, you would need to wait for more liquidity to be deposited from suppliers or repaid by borrowers.
To add collaterals, you need to go to the "Collateral" Pop-up in the supplying section, click on the "Add" button, select the amount you want to add as collateral and confirm the transaction in your wallet.
You can also remove an asset from being used as collateral by going to the "Collateral" Pop-up in the supplying section, clicking on the "Remove" button, selecting the amount you want to remove from being used as collateral, and confirming the transaction.
You can completely remove an asset from being used as collateral if your asset is not actively being used to borrow.
When you withdraw your deposited tokens, you will receive a higher amount than the amount you started with, proportional to the token’s APY.
For example, if you deposit 10 EGLD with an average APY of 7%. You will notice that your wallet contains 10 EGLD worth of hEGLD in it. Once you withdraw your EGLD after one year, you'll return the hEGLD and receive 10.7 EGLD (your original 10 EGLD plus the 7% APY).
They are at the core of the lending protocol as they are minted or burned whenever a user supplies or withdraws a crypto asset.
Every HToken has a unique exchange rate that increases over time, making them exchangeable to a superior amount of their underlying asset. However, the numbers of hToken in the user’s wallet remain the same.