Sturdy is a liquidity protocol enabling interest-free borrowing.
Sturdy is a lending protocol that pays lenders through yield earned on third-party platforms (from the borrower's deposited collateral). Generally, the interest earned by lenders is paid by borrowers. For yields to increase, borrowers have to demand leverage and pay more. When a borrower deposits an asset as collateral, Sturdy converts it into an interest-bearing token (ibToken) using protocols like Yearn or Lido. These ibTokens accrue yield over time and are then distributed to lenders in the same token they deposited. Borrowers on Sturdy have no interest payments as they are not paying lenders. Despite this, lenders can still earn high stable yields by deploying the borrower's collateral across third-party DeFi protocols. The yield on ibTokens is collected periodically and distributed to stablecoin lenders. The yield calculation is comparing the value of locked ibTokens to the value of collateral owed to borrowers. The excess ibTokens are unstaked, swapped for stablecoins, and distributed to lenders. Loans are interest-free except for the case where a reserve has utilization greater than 80%. Utilization is the percentage of deposited assets that have been borrowed. The interest rate increases by 3% for every percent that utilization is above 80%.
Sturdy takes a 10% fee on yield generated across its platform.
You earn lending fees on Sturdy by depositing your idle crypto assets to be used by borrowers looking for leverage.