Lender Brown

Example of a 'Free Loan' process

Let's take a look at 'Free Loan' process as an example. Brown puts $200 of his $500 into the LP pool as a liquidity provider.

when providing liquidity

Figure 11 : LP's liquidity flow

  1. Brown deposits USDT $500 in wevest.

  2. Brown provides liquidity after choosing an ETH/USDT pool and $200 out of $500.

  3. Brown receives wevest tokens and fees as an incentive to provide $200 liquidity.

  4. Brown gets yield farming interest for a total of $300(borrower Alice's $100 plus his own $200). In other words, Brown receives more interest income on $300(plus Alice's $100), which is more than he could receive on his $200.

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