Lending Pools

Olive's lending pools operate on a model reminiscent of Aave. When a user deposits assets, they receive aTokens (representing their supplied assets). Conversely, when a Vault borrows assets to facilitate user leverage, dTokens (indicative of the debt) are issued to the user.

Users have the following options:

  • Supply assets

  • Withdraw assets

It's important to note that while any user can deposit assets into the lending pool, only approved vaults have the privilege to borrow, ensuring they align with the leverage needs of yield farmers.


Any individual can deposit their assets into the lending pool. Upon deposit, they receive aTokens. These tokens not only represent their initial deposit but also accumulate yield over time, serving as evidence of their investment.


Users have the option to redeem their aTokens, allowing them to retrieve their initial assets along with any accumulated yield. This action is contingent on the availability of liquidity within the pool.

If the lending pool's utilisation is exceptionally high, users might need to wait. This could be until yield farmers decrease their leverage or until more assets are supplied to the lending pool.

Interest Rate Model

The risk associated with liquidity becomes pronounced when the utilisation rate (U) approaches 100%. To address this, our interest rate model is designed with a bifurcated curve centered around an optimal utilisation rate (U0). Below this rate, the curve has a gentle slope. Beyond U0, the curve's incline becomes steeper.

For a detailed understanding of concepts like the supply index, borrow index, supply rate, and borrow rate, please refer to Aave’s V2 whitepaper.

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