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Linx Lending is a decentralized, permissionless, and non-custodial lending protocol built on the Alephium blockchain, designed to optimize yield generation for lenders through peer-to-pool matching. Lenders can deposit assets into isolated markets (and later curated vaults) to earn competitive yields while maintaining security and transparency.
Key Features
Permissionless Market Creation: Any user can create a lending market by specifying a loan asset, collateral asset, liquidation loan-to-value (LLTV) ratio, oracle, and interest rate model (IRM). Markets are immutable once deployed, ensuring predictable behavior.
Isolated Markets: Each market operates independently, containing risks within individual markets and preventing systemic risk spillover.
(Coming soon) Optimized Yield with Vaults: Lenders can deposit assets into Linx Vaults, which are non-custodial and managed by third-party risk curators to optimize asset allocation across markets for maximum yield while mitigating risk.
Gas Efficiency: Transactions leverage Alephium’s high-throughput blockchain to minimize gas costs, enhancing profitability for lenders.
Yield Generation Mechanism
Lenders supply Alephium assets (e.g., USDT, ALPH, LINX, or wrapped tokens) to a specific market. The protocol employs the following process:
Deposit: Lenders deposit assets into a chosen market via the Linx App interface.
Interest Accrual: Interest is calculated using the market’s IRM, such as the DynamicFlowIRM, which dynamically adjusts rates based on supply and demand. Interest accrues in real-time and is credited to the lender’s position.
Withdrawal: Lenders can withdraw their assets and accrued interest at any time, provided sufficient liquidity exists in the market.
Yield Optimization
(Coming soon) Vaults: Linx Vaults, curated by risk experts, allocate funds across multiple markets to maximize returns while diversifying risk. Vaults are non-custodial, ensuring users retain control over their funds.
Dynamic Rates: The DynamicFlowIRM adjusts interest rates to balance supply and demand, ensuring lenders receive competitive yields. For example, a lender supplying USDC in a high-demand market might earn up to 20% APY, as seen in similar protocols.
Security and Transparency
Immutable Contracts: Markets are deployed as immutable smart contracts on the Alephium blockchain, ensuring no changes post-creation.
Audits and Verification: The protocol undergoes rigorous audits by reputable firms and employs formal verification to minimize smart contract risks.
Transparent Rates: All market parameters, including LLTV and IRM, are publicly visible, enabling lenders to make informed decisions.
Benefits for Lenders
Flexibility to choose markets based on risk tolerance and asset preferences.
Trustless operation with no intermediaries, leveraging Alephium's secure blockchain.
Low transaction costs due to Alephium's efficient infrastructure.
Lending on a proven and battle tested PoW infrastructure
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