The DeFi Lease defines a money market between a lender looking to earn a yield on stablecoins, and a borrower, looking to borrow more digital assets than his current equity. To borrow assets, the borrower locks up a downpayment as collateral and can leverage his holdings up to 3 times in a preferred digital asset.
Nolus sources its deposit yields from the interest-bearing DeFi Leases and incentivizes lenders with additional rewards above the initially agreed interest by releasing NLS tokens from the Incentivization Pool.
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The never-changing fixed borrower terms of interest throughout the lease contract provide predictability for future cash flows and reward distributions toward lenders. The cumulative profits of the protocol lease contracts, swap spreads, and tx fees are used to purchase back NLS tokens from the open market, thus driving price appreciation of the token.
The Incentives pool account incentives will attract capital during the early stages of development and decrease proportionally when the protocol’s Total Value Locked (TVL) grows to certain thresholds.
[Borrow (Lease)](<https://docs-nolus-protocol.notion.site/Borrow-Lease-cc7b4cc25cca43de97ab40fbac88a76e>) ➡