Lending Pools: Liquidity Made Efficient

Folks Finance
3 min readJul 24

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Higher APRs, deeper liquidity, and an optimized DeFi experience arrive with Lending Pools. Launched in collaboration between Folks Finance and Pact, Lending Pools are a unique product enabling enhanced returns obtained from lending markets and decentralized exchanges’ liquidity pools.

Lending pools are a game-changer in capital efficiency, facilitating increased APRs. Let’s dive in!

How do Lending Pools work?

Traditional Automated Market Maker (AMM) pools involve pooling two assets, allowing users to trade the pair, which generates fees for liquidity providers. Although liquidity is always available, this system has the disadvantage of leaving assets unused for long periods of time. For this reason, Folks Finance aims to make this dormant liquidity more efficient by drawing it from Folks’ lending markets.

Liquidity Providers will be able to receive both swap fees from the DEX side and lending interest from Folks Finance’s lending markets, as their assets are utilized in both the lending and AMM protocols.

The system is made possible by creating pools using Folks’ deposit tokens, fTokens, instead of the normal assets ordinarily used in Liquidity Pools.

With Lending Pools, you can receive APR from the interest generated by borrowers in the Folks Finance lending markets, plus fees generated by trading through Lending Pools on Pact.

Lending Pools Q3 Boost!

In Q3, 2023, Lending Pool APYs are boosted with the Targeted DeFi Rewards allocation, distributed by the Algorand Foundation. Over 2 Million ALGO are now available for Lending Pool liquidity providers!

Enjoy higher yield on $ALGO, $gALGO, $wETH, $wBTC, $USDC, $USDt, and $GARD!

The Targeted DeFi rewards allocation for different token pairs in Q3, 2023

How to Get Started?

Here’re a few steps that will help you start gathering efficient returns coming from Folks Finance lending markets and Pact liquidity pools.

➡️ Go to Lending Pools on app.folks.finance.

Go to the deposit page on app.folks.finance, and click Deposit next to a lending pool.

➡️ Deposit on Pact

You’ll be redirected to Pact, where you’ll do the depositing. Input the amount of each token you’d like to deposit. Click confirm to continue, and sign with your wallet.

➡️ Stake on Farms on Pact.fi.

When the deposit is finalized, you can stake it for extra rewards. Click Stake to go to the farms page.

Input the amount of LP tokens you’d like to stake. Click Stake to continue, and sign with your wallet.

➡️ Enjoy Boosted Rewards!

To learn more about how to enter Lending Pools, check out our video tutorial on Folks Academy.

Get started with Lending Pools by depositing now.

About Folks Finance

Folks Finance is a leading DeFi platform providing innovative tools for lending, borrowing, trading and managing digital assets, all in one place. Folks Finance streamlines the DeFi experience with a UI and UX competitive to centralized exchanges, all while running on permissionless smart contract technology.

About Pact.fi

Provide liquidity, earn rewards and swap assets with the most trusted AMM. As one of the most user-friendly Algorand dApps, Pact is a mobile-first designed trading experience, offering deep liquidity and low transaction fees. With accessible smart contract functionality, transactions on Pact are available to users of all levels of wealth and experience.

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Folks Finance

DeFi at its finest: lend, borrow, trade, and manage digital assets all in one place.