For Backers
Backers provide rate stability to borrowers and earn yield in return. As a backer, you absorb the variable rate risk — profiting when variable rates stay below the fixed rate you offer.
How It Works
- Deposit capital and post an offer on the orderbook with your desired fixed rate
- When a borrower takes your offer, a position is created
- You collect the fixed rate from the borrower and pay the actual variable rate to the protocol
- The spread between fixed and variable is your profit (or loss)
Try It Out
Use the simulator below to explore backer economics under different rate scenarios. Adjust the number of positions to see how diversification affects your total P&L.
Backer Simulator
See how leverage amplifies backer returns and how reinvestment compounds growth.
After each 4-week position expires, roll profits back in as new backing capital. More capital = more notional backed = more yield next cycle.
Strategy
Setting Your Rate
The fixed rate you offer is the key lever. Higher rates attract more borrowers but require higher variable rates to be profitable. Lower rates are safer but may not get filled.
Diversification
Backing multiple positions across different markets reduces your exposure to any single rate spike. The simulator above shows how spreading capital across positions smooths returns.
Continuous Re-investment
Your reserve deposit is sized to cover the worst-case scenario over the remaining duration. As time passes and the position gets closer to expiry, the worst case shrinks and excess reserve capital is freed up. You can redeem this surplus and re-invest it into new positions, compounding your yield without adding new capital.
Risk Management
- Best case — Variable rates stay well below your fixed rate. You keep the spread.
- Worst case — Variable rates spike above your fixed rate. You pay the difference out of your backing capital.
- Break even — Variable rate averages exactly the fixed rate over the position duration.