Loopscale Vaults offer a passive and efficient way to earn fixed-rate lending yield across multiple Loopscale Markets. Users deposit into a Vault optimized by a Vault Curator who is responsible for defining eligible markets and loan terms. Each Vault focuses on a single lending asset (e.g., USDC, SOL) and allocates that asset across multiple borrower-facing markets. Yield is generated from borrower interest payments, and users retain full control over their funds with the ability to withdraw at any time, subject to liquidity availability.

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Vault Mechanics

  1. Users deposit a supported asset into a Vault
  2. The Vault automatically deploys capital across markets according to the terms published by the Vault Curator
  3. Interest from borrowers flows back to the Vault as loans are started and repaid, boosting the value of the users’ deposits over time
  4. Users can withdraw funds (plus accrued yield) at any time, as long as there’s available liquidity
Withdrawals are instant when the liquidity buffer is full. Otherwise, users can either join a queue or withdraw instantly with a small fee.

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Vault Curation

A Curator defines the parameters that shape the Vault’s yield strategy, risk exposure, and borrower profile. Each Vault is also designed with built-in transparency and risk protections, including public parameter visibility, time-locked changes, and limits on curator control. These safeguards help ensure depositors are never exposed to sudden or opaque shifts in strategy. There are a number of key levers available to Curators that uniquely modify the behavior of a Vault.

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Collateral Eligibility

Curators determine which tokens can be used as collateral for borrowing from the Vault. For each accepted collateral type, curators set:
Loan-to-Value (LTV)
How much can be borrowed against a given collateral
Liquidation LTVLTV threshold at which a loan may be liquidated
The choice of collateral, and the limits set around it, are central to a Vault’s risk management strategy. Changing which tokens are accepted as collateral or adjusting LTV thresholds triggers a 24-hour cooldown, giving depositors time to react to potential shifts in Vault risk.

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Rates and Yield

Curators control how the Vault supplies liquidity to lending markets by setting a interest rate the borrower pays to borrow against each accepted collateral type for each duration. Fixed-rate durations available on Loopscale are 1 day, 1 week, 1 month, and 3 months. Curators have the ability to limit supplied liquidity to a subset of loan durations. This allows curators to tune the Vault to different goals: short-term yield generation, long-duration lending, or targeted exposure to specific borrower types.

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Fees

Curators may further define the Vault’s yield curve with fees charged to borrowers or suppliers and earned by the curator.
Origination Fees
One-time borrow fees defined as a percentage of principal
Interest FeesDeposit fees defined as a percentage of interest earned

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Rewards

Curators may also deposit tokens to be automatically distributed proportionally to suppliers according to a curator-defined schedule. These additional rewards are reflected in the Vault APY displayed to suppliers. Together, these settings define the Vault’s supply yield, the range of offers it places across fixed-rate markets, and how attractive those offers are to borrowers.

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Risk Management

Each Vault can also be configured with system-level risk controls. These parameters govern Vault behavior in edge cases or high-demand scenarios. Curators can define:
Liquidity Buffer
Percentage of deposits held idle for instant withdrawals
Max Loan SizeMaximum loan size from Vault to limit individual loan exposure
Liquidation PenaltyAdditional fee to borrower if loan is liquidated
These settings help ensure that Vaults are not overexposed, that liquidity remains available for depositors, and that the Vault operates profitably in adverse market conditions.

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Strategy Changes & Cooldowns

To promote trust and transparency, any changes to high-risk parameters—such as collateral types or risk thresholds—are subject to a 24-hour time lock. This applies to:
  • Adding or removing collateral
  • Modifying LTV or liquidation thresholds
Other settings, such as APYs and origination fees, can be updated immediately. This system ensures depositors are never blindsided by sudden changes to Vault risk or strategy, and helps maintain fairness across all participants.
For a detailed breakdown of current Vaults and their parameters, visit the Lend page on the Loopscale App.