Getting oriented on Rain.Fi as a lender can be a little more upfront work than other lending alternatives; however, it requires very little maintenance once set up.Lending pools put the power into your hands as a lender, allowing you to dictate your lending interest rates, loan-to-value ratios, duration, and what collections you are willing to loan to. We’ve even added an auto-compounding feature to reinvest generated fees back into your pool, as well as dynamic interest rates to maximize your yield while remaining competitive.

Before getting into how to set up your own pool, let’s first cover how lending pools work and what the competitive landscape looks like:

• Lending pools get aggregated into a front page for borrowers (see Borrowing 101)
• This dynamic provides better rates for borrowers while giving diligent lenders the ability to earn more by “front running” the competition (offering better terms to get your loan offers chosen).
• When setting up a pool, make sure to review what the competitive offers are for each customization category.

How to set up a lending pool

Once you have connected your wallet and headed to the “lend” section of Rain.Fi, you will have the option to “create a pool”.

You will first be asked if you would like to choose between a “Default” or “Custom” pool setup.

• Default Configuration: Basic pool set up, with the ability to select collections and the duration of the loan. Ideal for beginners.

• Custom Configuration: Full control over pool setup, including settings to compound fees, customize dynamic interest, and max loan amount per loan.

  • Compound fees: Adds loan earnings back into the pool for use.
  • Base Interest: The minimum interest that is charged per loan
  • Interest rate: The general interest rate of your pool
  • Curve rate duration: Adjusts the interest rate based on the duration of loan relative to max loan duration set
  • Curve rate liquidity: Adjusts the interest rate based on the ratio of liquidity to pool size
  • Duration: How long you are willing to issue loans for
  • Max amount per loan: The maximum someone can loan out from your pool at once regardless of loan-to-value settings.

  

For both default and custom configuration loan pools, you will next have to set your loan to value ratio.

• Loan to Value (LTV): The ratio between the NFT’s floor price and the loan value that you are willing to give it. E.g if your LTV is set to 50% for a 100 $SOL NFT, the borrower will be able to loan 50 $SOL.