Frequently asked questions
Risedle ETHUSDC Vault is the main vault and source of liquidity of the Risedle Leveraged Tokens protocol. It allows user to lend their USDC and earn variable interest in real time. The USDC inside the vault is borrowed by Risedle Leveraged Tokens to leverage the collateral.
When the user supply USDC token to the Risedle USDC Vault, they will receive rvETHUSDC token in exchange and begin earning a variable interest rate instantly. Interest accrues every seconds, and lenders can withdraw their principal plus interest by redeeming the rvETHUSDC token.
As interest accrues to the USDC supplied, rvETHUSDC are redeemable at an exchange rate (relative to the underlying asset) that constantly increases over time, based on the rate of interest earned by the underlying asset.
rvETHUSDC token is ERC-20 token that represents a share of Risedle ETHUSDC Vault. The rvETHUSDC value will increase overtime when interest in Risedle ETHUSDC Vault is accrued.
User can get rvETHUSDC token by depositing USDC to Risedle ETHUSDC Vault. User can convert rvETHUSDC back to USDC at anytime.
Interest is accrued in real-time. The value of rvETHUSDC is automatically updated when there is activity in the smart contract. This includes:
- 1.Mint leveraged tokens
- 2.Redeem leveraged tokens
- 3.Deposit USDC
- 4.Withdraw USDC
User can withdraw initial deposit plus interest at anytime. The amount of interest will depends on Supply APY and how long user deposit their USDC.
Bankrun happen when lenders withdraw all idle USDC from the vault:
This will cause liquidity risk: some of lenders cannot withdraw the USDC and the interest.
When the bankrun happen, the smart contract will automatically push the interest up to incentives leveraged tokens holders to close their position. If there is no ETHRISE leveraged tokens close their position, the total borrowed will go up and the leverage ratio of leveraged tokens will go up. The protocol will automatically selling some collateral to repay the debt (rebalancing down).
This will allows rvETHUSDC holders to realise their initial deposit + interest.