Lending Desk

What a bank does here: its lending desk decides who gets loans, sets the rates and keeps the spread between what borrowers pay and what depositors earn. What you do instead: when you supply assets to a lending pool or a trading pool, you are the lending desk. Understanding how the desk makes money tells you where your yield comes from and when it can disappear.

Key concepts

• Utilization. The share of a pool that is borrowed. On September 24, 2026, Aave V3’s Ethereum USDC market was about 92.7% utilized: borrowers paid 4.34% and lenders received 3.62% (variable).
• Interest-rate curves. Protocols raise rates sharply as utilization approaches 100% to attract new lenders and push borrowers to repay.
• Reserve factor. The cut the protocol keeps — the gap between what borrowers pay and lenders receive.
• Liquidity providing (LP). On exchanges such as Uniswap you supply two tokens and earn a share of swap fees.
• Impermanent loss. When prices move, an LP position can end up worth less than simply holding the two tokens. Fees must outrun this to profit.

Lender or market maker?

	Lending pool	Liquidity pool
Who pays you	Borrowers (interest)	Traders (swap fees)
Main risk	Bad debt, contract bugs, stuck withdrawals at high utilization	Impermanent loss, contract bugs
Effort	Low — supply and monitor	Higher — choose ranges, rebalance

Check your understanding

Guides in this track

• How Lenders Actually Get Paid: Utilization in Plain English
• Uniswap Liquidity Providing and Impermanent Loss

Education only, not financial advice. Rates change and are not guaranteed. CoinPayBank is not a bank.