Yield & Rewards

The core of Firyx's economic model is the alignment of incentives between lenders and borrowers, creating a symbiotic relationship where both parties benefit from the protocol's capital efficiency. Unlike traditional lending platforms where interests can be misaligned, Firyx ensures that the success of the borrower directly enhances the returns for the lender.

Yield within the Firyx protocol is generated from two primary sources:

1. AMM Trading Fees/Rewards: The underlying Concentrated Liquidity Market Maker (CLMM) position generates yield from trading fees and issues rewards for using the platform.

2. Borrower Interest Payments: Borrowers pay a dynamic interest rate on their loan, which is paid directly to the lenders.

Lender

Lenders on Firyx benefit from a simple, passive investment vehicle that provides returns often superior to standard staking.

A lender's capital earns its proportional share of the AMM trading fees, and is supplemented by the interest fees paid by borrowers, creating a blended yield that enhances overall returns.

Lender capital is never directly disbursed to the borrower. Instead, it is deployed into yield-generating LP positions under the protocol's control, eliminating the risk of borrower default or misuse of funds.

All yields, including trading fees and interest payments, are automatically compounded within the Loan Position, providing a hassle-free investment experience.

Borrower

Firyx offers borrowers a unique opportunity to access capital for yield farming without the need for upfront collateral, which is a major barrier in DeFi.

Borrowers can instantly access capital to yield farm without needing credit scores, whitelists, or posting collateral of greater value. They only need to provide a small deposit (Protocol Reserve) to cover the expected interest.

By borrowing funds, borrowers can farm with leverage, amplifying their exposure to the AMM's yield. This allows for potentially outsized returns on their small initial deposit.

Borrowed funds are immediately put to work in a pre-approved, liquidity-generating strategy, ensuring the capital is used for a productive purpose.