Lending on VALR enables you to earn interest by offering your cryptocurrency assets to other VALR customers, particularly those who need funds for margin trading. Instead of keeping your crypto idle, you can lend it out through VALR's easy-to-use lending feature, earn passive income, and grow your holdings over time.

How Does It Work?

To participate in VALR's lending, you select an available asset to lend, specify the amount, and choose between accepting the prevailing rate or setting your desired interest rate. Hourly auctions match lenders with borrowers, and if your offer is competitive, your assets will be lent. All lenders earn the same hourly interest rate, which is the maximum rate offered by lenders each hour which fully covers the demand to borrow on VALR.

Here's a summary of key terms used on the platform:

• Next Auction: The countdown to the upcoming matching of lenders and borrowers.
• Offered Amount: The funds you've made available for lending.
• Locked Amount: Funds actively being lent following a successful auction.
• My Offer APR: The minimum annualized interest rate you've specified. If it's too high compared to other offers, your assets will not be lent. If you've chosen the prevailing rate, this will show the minimum possible rate, which gives you the best chance of being included in the total funds being lent to margin traders.

Understanding Hourly Auctions

VALR conducts hourly auctions to match borrowing demand with lender offers. The system prioritizes lower interest rates, matching them first until all borrowing demand is fulfilled. The highest matched interest rate then becomes the rate for all matched lenders in that auction. This means lenders may receive a higher rate than they specified, but never a lower one. If a lender's specified rate exceeds the highest matched rate, their funds remain unused and automatically enter the next auction.

This process ensures that lenders offering competitive rates are more likely to have their funds utilized, while also potentially benefiting from higher rates if market demand allows. Lenders whose rates are too high for the current market conditions will see their funds remain available for future auctions.

Understanding APR

APR (Annual Percentage Rate) represents the interest rate you earn on your lent assets over a year. It's calculated as an annualized rate based on hourly lending rates, providing an estimate of your potential return. Your actual earnings may vary depending on the specific rates achieved during each hourly auction.

Step-by-Step Guide to Start Lending

Here's how you can start lending your assets on VALR:

1. Log In to Your VALR Account

If you don't have an account yet, sign up here.

2. Access the Lending Feature

In the top menu bar, hover over "Earn" to reveal a drop-down menu. From this menu, click on "Lending" to access the landing page.

3. View Available Currencies to Lend

You'll see a list of available currencies with their expected APRs based on current rates. If you don't own an asset, you can buy it directly from this page.

4. Start the Lending Process

If you own any of the available currencies, click the "Lend" button next to your chosen asset.

5. Specify the Lending Amount and Interest Rate

Enter the amount you wish to lend. You have two options for setting your interest rate:

• Prevailing Rate: This option gives you the best opportunity to participate in the next auction at the best available rate.
• Specify Rate: Set a custom annual percentage rate (APR) or hourly rate. Be aware that if your rate exceeds those included in the auction, your assets may not participate. The interface displays the current estimated APR to guide your decision.

6. Confirm Your Lending Offer

After specifying your amount and rate, click "Submit Offer" to confirm your participation. Once confirmed, your offered assets will be displayed as "Unused," indicating they're awaiting consideration in the next hourly auction.

7. Managing Your Lending Offers

After submitting your offer, you can modify or cancel it as long as it hasn't been locked into an auction. To view your offer history, click the “>” icon next to the "Manage" button and navigate to the "Offer History" tab.

8. Earn Interest

Funds in use earn interest hourly. Click the “>” icon next to the "Manage" button to see your interest payment history. These payments also appear in your account transaction history.

9. Unlocking Funds

You can unlock either a portion or the entire amount of your locked funds at any time. To do this, click "Manage" → "Unlock" for the asset you wish to unlock. However, be aware that the funds may only become available after the next hourly auction runs—this means you might need to wait up to an hour, or perhaps longer if there is too much demand for borrowing funds on VALR.

During the unlocking process, your funds will continue to earn interest. Once unlocking is complete, the funds will be available in your account but will no longer generate interest.

 

FAQs:

1. What happens if my offer isn't included in the auction?
If your specified rate is too high for the current hourly auction, your assets will remain available for future auctions until your offer is matched. Your funds can also be unlocked immediately when unused.

2. Can I change or cancel my lending offer?
Yes, you can adjust or cancel your offer at any time, the adjustment is effective from the next auction going forward.

3. How is the APR determined for lending?
The APR is determined through the hourly auction process, where supply and demand influence the lending rate. In each auction, the highest matched interest rate becomes the rate for all matched lenders, setting the APR for that period.

4. When will I receive the interest I earn?
Interest is calculated hourly and added to your balance once the auction is complete every hour.

5. Are there any risks involved in lending? Lending always involves some level of risk, including the potential for borrower default. Please refer to the Margin Terms of Service found here as well as VALR’s Risk Disclosures found here for further details.

6. How can I track my lending history?
You can track your lending history, locked amount, offer APR, and interest earned in the "Lending" section under "Earn."

7. Can I still use my funds to trade once they're part of an offer?
No, once you include funds in an offer to lend, they become unavailable for trading or withdrawal.

8. Can I trade with locked funds?
No, funds that are lent out cannot be used for trading or withdrawal.

9. What do the different offer statuses mean?

• Unused: Your offer is waiting to participate in the next auction and isn't earning interest yet.
• In use: Your funds are locked, earning interest, and will automatically participate in the next auction.
• Unlocking: Your funds are still earning interest but will be unlocked after the current period ends and won't participate in the next auction.

10. Why is only part of my offered amount "locked"?

If your specified rate was the highest among those considered in an auction, only a portion of your offer might be lent out due to limited borrowing demand. This can also happen when everyone, including you, chooses the prevailing rate, but there isn't enough demand to match all lender offers with borrowers.