Yield Mechanisms
Through algorithmic schemes, participants can allocate liquidity, receiving a yield represented as an annualized rate. Evaa's protocol ensures optimized yield distribution, incentivizing liquidity provision and protocol engagement.
Scenario
A crypto enthusiast, Mike, has some idle assets and wants to earn passive income without selling them.
Steps
Deposit for Yield: Mike deposits his assets into Evaa's liquidity pool.
Yield Accumulation: Over time, as borrowers take loans from the pool, they pay interest. This interest is distributed among the liquidity providers like Mike.
Claiming Returns: Mike decides to withdraw his assets along with the earned yield after a certain period.
Dynamic Rates: The yield Mike earns is dynamic, determined algorithmically by Evaa based on borrowing demand and total liquidity.
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