Supplying assets is how users earn yield by providing liquidity to Polyester’s lending pools.
When users supply an asset, it is pooled with other users’ funds and made available to borrowers. Interest rates adjust dynamically based on utilization.
Before Supplying
To supply assets, users must already have funds inside the Polyester Exchange.
Supplied assets are always uAssets, meaning they must exist in either a user's [Funding Account]/docs/user-docs/funding-account/overview) or Unified Trading Account before they can enter a lending pool.
Users who don’t yet have funds in the exchange will need to deposit first. See Deposit Funds.
Understanding Lending Pools
Each lending pool corresponds to a specific asset and aggregates supply from all users.
On the Lending page, there is a list of available pools along with key information for each one, including utilization rate, total supplied, total borrowed, and the current supply/borrow APY. Pools can be filtered by category such as popular assets, stablecoins, or highest APY.
Current Polyester Lending TVL:
How Lending Pools Generate Yield
All supplied assets for a given token are pooled together. Borrowers draw from this pool, and interest paid by borrowers is distributed to suppliers.
As utilization increases, APY rises to incentivize additional supply. When utilization decreases, APY adjusts downward. This automatic rate model helps keep lending markets balanced without manual intervention.
How to Supply Assets
To supply assets:
- Navigate to the Lending page
- Locate the supply pool
- Click 'Lend' on that asset
In the supply modal, select the source account (Funding or Unified Trading), enter the amount to supply, and review the current APY before confirming.
Once confirmed, the user's assets are transferred into the lending pool and begin earning interest immediately.
Using Supplied Assets as Collateral
After supplying assets, users may choose to mark them as collateral.
Collateral is a flag applied to supplied assets that enables borrowing. Settings can be updated at any time to remove assets from being flagged as collateral, and borrowing power depends on asset-specific risk parameters.
Viewing and Earning APY
Polyester uses a share-based accounting system to track ownership of each lending pool.
When a user supplies an asset, they receive a proportional number of supply shares in the lending contract. These shares represent their claim on the pool rather than a fixed balance. As borrowers pay interest, the total value of the pool increases, and the share index rises. The supplier's number of shares stays the same, but what those shares are worth increases over time.
For example, if a user supplies 10 ETH, they receive shares representing that deposit. As interest accrues, the pool grows. Later, those same shares may entitle them to 10.5 ETH, where the additional 0.5 ETH represents earned APY.
This model ensures accurate, gas-efficient interest distribution without continuously updating individual balances on-chain.
The lending interface shows earned interest separately from the supplied principal, making it easy to understand how much yield has been accumulated at any time.
Redeeming Earnings
By default, earned interest accrues in the same asset that was supplied.
Use the ‘Claim APY’ button on the lending homepage to claim accumulated APY. Users may also choose to auto-convert earned interest when claiming.
Leaving a Supply Pool
Suppliers can withdraw supplied assets at any time, subject to safety constraints.
To remove supply:
- Open the pool being supplied to
- Click Remove Supply
- Select the amount to withdraw and where to withdraw it
Once withdrawn, assets return to the Funding Account or Unified Trading Account.
Safety of Supplying on Polyester
Lending on Polyester protects suppliers across all market conditions.
All borrowing is overcollateralized, meaning borrowers must deposit more value in collateral than they are allowed to borrow. If a borrower’s position becomes unsafe, liquidation occurs to keep supplies whole.
This ensures that suppliers are protected from borrower defaults and that lending pools remain solvent even during periods of market volatility.