Lending & mTokens

Diversify Your Earnings with Peer-To-Peer Lending

Access Capital and Seize New Investment Opportunities

Lending: Earning Yield on Your Assets

Lenders can supply assets such as USDT, MVRK, or wBTC to lending pools and earn interest on their deposits. In return for supplying assets, lenders receive mTokens, which represent their contribution to the lending pool, such as mUSDT or mEURL.

These mTokens can be staked in Maven Finance's Yield Farms to further increase yield or traded/sold on the open market. They also serve as the means to reclaim the original deposit and claim lending rewards.

Note: mTokens are your receipt for your lending deposits. If you sell or transfer your mTokens, you are transferring the right to withdraw the lending deposit for those mTokens to their new owner.

For example, let's consider Alice who supplies 25,000 USDT to the Maven Finance USDT lending pool. She receives 25,000 mUSDT tokens, which she can hold in her wallet, stake in Maven Finance Farms, or trade/sell.

If she chooses to sell or trade her mUSDT tokens, she forfeits the corresponding amount of deposited tokens and the rewards associated with them, as she transfers the rights to the buyer.

No Impermanent Loss Risk

When providing liquidity to a decentralized exchange, impermanent loss is a significant risk, which emerges when there's a substantial price disparity between two tokens in the pool. This can lead to liquidity providers incurring value loss relative to simply holding the tokens.

However, Maven Finance's Lending model alleviates this risk. Here, assets can be reclaimed at a 1-to-1 ratio with their corresponding mTokens, essentially eliminating the risk of impermanent loss. This ensures your investments remain secure while maximizing your potential returns.