# Loan Vaults ## Lend Page
## What do the Lending Vaults do? You earn interest by depositing into the Lending Vault from your wallet, which gives you a token in your wallet. You can sell the token, leverage it on other protocols, use it as collateral on World, and/or use it to redeem your principal + interest later. It's up to you. Lending Vaults on World can only do 2 things: 1. Lend in the World lending market 2. Borrow in the World lending market There is only ever 1 asset per lending vault. ## How do I use it? 1. You request to deposit your asset into the associated lending vault from your wallet. 1. NOTE: If you have assets on the exchange you want to deposit, you first need to withdraw them to your wallet and deposit them into the vault from your wallet. The UX is not perfect, but it is designed to help you with this flow. 2. The request is processed by the vault operator, usually within 10 minutes. The processing queue is there to prevent manipulation while the product is in Beta. Eventually, this wait time will come down to seconds. 3. Once your request is processed, you will get vault tokens. The tickers for these vault tokens are wl\, for example wlUSDm and wlBTCb. 4. You can do whatever you want with your lending vault tokens, including selling them, levering them up on Aave and Morpho, and depositing them back into World to use as interest bearing collateral. 5. When you want to withdraw your asset from the vault, you give the vault your lending vault tokens, wait for the request to process, and it gives you back your assets + interest. ## Wait 10 days for full interest You can withdraw your assets any time after depositing into the lending vault, but depositors should wait 10 days or more before withdrawing to receive their full, expected interest payment. Similarly, don't withdraw your assets on day 19, wait until after day 20. As the market gets larger, this problem will go away. The reason is because borrowers may borrow for up to 10 days and, assuming the borrower does not close the loan early, the borrow pays the interest to the lender at the end of the 10 days. Because the borrowers are not yet diverse, there tends to be prolonged periods of no interest payments, and then all the interest paid on the same day - this period can be at most 10 days long. ## Where does the yield come from? The lending vault lends to borrowers and the borrowers pay interest. On World, users can safely borrow under-collateralized, so there is inherently more borrow demand than on lending protocols with only over-collateralized lending. Read [Why Borrow?](/essentials/why-borrow.md) to understand the motivations to borrow. The simplest source of borrow demand comes from the "Auto-borrow" button on the Trade page:
and on Desk:
## Levered Basis Trade The [#levered-basis-trade](#levered-basis-trade "mention") additionally generates strong borrow demand. LBT trades can be done at >50x leverage, which is all borrow demand; $1 in the Bullish LBT at $50x leverage borrows $50. ## What is the risk? Borrows can default if the market falls faster than the liquidators can act. This risk is similar to Aave, Morpho, and other DeFi lending protocols in that, when the value of the collateral drops, liquidators come in and sell the collateral asset. When they sell the collateral asset, the money goes to cover you as the lender. If the liquidators fail to liquidate for an unexpected reason, the lenders can lose money. That risk is the same here. World's equivalent of "LTV ratios" are [Risk Parameters & Stats](/essentials/risk-parameters-and-stats.md). It is also possible that the withdrawal request can take longer to process than expected. This is possible for 2 reasons: 1. If the lending vault manager suspects vault manipulation, it can slow the withdrawal queue processing. 2. If there is too much withdrawal pressure the vault can slow (but not stop) withdrawal processing. This is because all loans have 10 day terms. If the lending vault needs to process withdrawals before the loan durations are finished, it may chose to borrow assets to process withdrawals. To prevent manipulation, it does this more slowly and carefully. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.world.inc/vaults/loan-vaults.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.