By depositing your favored listed assets, you will be able to receive lTokens (lay ibTokens) and earn lending fee income. lToken is a deposit certificate of an underlying asset that accrues interests from being borrowed on Starlay Finance. lToken is redeemable at any time at a 1-to-1 rate with the underlying asset on Starlay Finance as long as there is liquidity available.
Reward 1: The Interest Rate on Loans
An interest rate paid by a borrower of an asset is distributed to depositors.
The interest rate of an asset is calculated by the utilization rate U.
U=TotalBorrows/TotalLiquidityU \hspace{1mm} = \hspace{1mm} Total Borrows \hspace{2mm} / \hspace{2mm}Total LiquidityU=TotalBorrows/TotalLiquidity
As U gets closer to 100%, depositors run the risk of not being able to withdraw their assets, which leads to a higher interest rate. For instance, when an asset is scarce, it requires high-interest rates for repayments of loans and additional deposits.
Reward 2: Flash Loan Fees
Starlay Finance returns 0.09% of the volume used in Flash Loan to depositors.
Flash Loan is an advanced feature for developers. There is no specific page for this feature for a user on Starlay Finance. It allows developers to borrow an asset without collateral, as long as the borrowed amount and a fee are returned before the end of the transaction. There is no real-world analogy to Flash Loan. Understanding this requires some basic knowledge about state management in blockchains.