Curvance will initially use a heavily modified version of Compound Finance to create risk-isolated lending markets. Curvance uses a multi-pool lending market model, where stable coin depositors can choose their risk tolerance based on which long-tail assets are supported in each pool. This model is somewhere between the conventional shared pool model of AAVE V2 and Compound V2 and the completely isolated pool model of Compound V3. The reason we opted for this approach is that fully isolated pools have significantly reduced capital efficiency, whereas a single pool has maximum capital efficiency, but every asset introduces greater systemic risk.
This structure ensures the risk and potential flaws inherent in other pools do not compromise our lending markets. When you deposit, Curvance's smart contracts redirect the supplied assets back into their respective protocol to earn a yield while you borrow against it. For example, cvxCRV will be staked on Convex and vAMM-VELO/USDC on Velodrome. Lenders will receive a cToken minted from the Curvance protocol representing their pool share. If you choose to take advantage of your now unlocked collateral by borrowing against them, these tokens will also be used to redeem your supplied collateral after you pay back the tokens borrowed.
NOTE: If you are among one of the first to lend assets, you may not earn interest until the pool is bootstrapped with enough liquidity for others to borrow. Hence, you will see a temporary 0% APY for that pool. However, keep in mind that this also entails earning a higher share of the interest in being an early supplier and owning a more significant pool percentage.

What determines the interest earned on my deposits?

Since the protocol routes collateral deposits to earn yield, the interest rate is determined mainly by what is offered on the asset's underlying protocol. Interest rates for supplying assets to the pools are based on pool-specific interest rate curves and pool utilization.
Pool utilization is the ratio of borrowing versus the supply of an asset. For example, if 1,000,000 FRAX are supplied to the pool and 800,000 FRAX are borrowed, pool utilization is 80%.
Interest curves can differ between assets and their respective pools, and they usually rapidly rise after a certain percentage of utilization. This can help protect you as the supplier from being unable to exit your positions because of low remaining liquidity.
NOTE: A pool's base supply interest rate is compounding (APY).


The Curvance protocol applies a fee for all collateral deposit assets on the platform. This fee goes towards further strengthening the protocol reward flywheel by distributing it to veCVE token lockers.
Read more about a few of the many reasons users choose to borrow assets on our platform in the Borrowing section and more on the Fees in our Platform Fees section.