Suilend 101: Understanding Yield In the past week there’s been a lot of attention on where yield comes from in DeFi and how sustainable it really is. Today we’re breaking down how yield works in lending protocols like Suilend and why it's considered a reliable yield source. 🧵

When you deposit on Suilend, you’re supplying liquidity to a shared pool. Borrowers take loans from that same pool by posting collateral. The interest borrowers pay becomes the yield depositors earn (minus a small protocol fee).

Lending rates revolve around one key metric: utilization. If utilization is low, liquidity is abundant → rates stay low. If utilization is high, liquidity is scarce → rates rise to attract deposits. Suilend uses a dynamic interest rate curve to set rates automatically.

When liquidity gets tight, interest rates rise. This discourages excessive borrowing and rewards depositors with higher yields - keeping the market in balance. As seen below: USDC rates spiked last week but quickly reverted to the average 9.7% APR as liquidity returned.

As a reminder - all parameters on Suilend are fully transparent and accessible onchain. Explore each pool’s data - from interest rate curves and utilization to reserve factors and related objects - directly on the app. Check the USDC pool parameters:

TLDR: Deposit interest on Suilend comes directly from onchain borrowing activity - fully transparent on Sui. No external fund managers. No backroom deals. Just borrowers paying interest and depositors earning it. That's real yield.