Sturdy Finance — a new DeFi lending protocol that allows users to earn high returns from stablecoins or take out interest-free loans.
About Sturdy Finance
"Lenders" deposit assets they would like to earn income on, while "borrowers" provide collateral and take assets, deposited by lenders as a loan. Under existing lending protocols, interest, received by lenders, comes from borrowers. Thus, in order for lenders to earn more, borrowers must pay more. Sturdy uses a different model where the yield comes from the borrower's collateral.
Some features:
| 1 | When borrowers provide a token as collateral, Sturdy converts it into an interest-bearing token (ibToken), using protocols such as Yearn or Lido. |
| 2 | Over time, these ibTokens accumulate income. |
| 3 | The income from these tokens goes to the lenders in the same token they deposite. |
Existing lending protocols require borrowers to repay variable and usually high interest rates. With Sturdy, interest rates are locked at 0%.
Several other protocols also offer interest-free loans, but they have a fee for opening or closing a lending position. Sturdy has no fees, borrowers pay only for gas. Many of these protocols also issue their own stablecoins, which creates pegging risk. In contrast, Sturdy allows users to borrow well-established stablecoins such as USDC, USDT or Dai.
When the deposit is withdrawn, the deposit process is reversed. Sturdy de-stakes the ibToken and returns the token, originally provided as collateral, back to the user. Please note that the borrower will only be able to withdraw as many collateral tokens as they have provided, regardless of the earned ibToken interest.
More about defi app
To participate, you need a crypto wallet such as MetaMask. To start, simply provide the wallet with a small amount of ETH/FTM (depending on which chain you are on) to pay for transactions, as well as any supported tokens you wish to deposit. Security - the team's priority and the developers take every precaution to keep user funds safe. This includes 3rd party audits (one completed, more on the way), implementing multi-signature + temporary blocking, and using Chainlink oracles.