Supplying is the action of providing an asset to a money market pool on Minterest for the purpose of allowing that asset to be borrowed by another party. As compensation, the supplier earns a market interest rate and additional rewards in Minterest's native MNT token.
Can supplying incur an impermanent loss?
No, Minterest is a lending platform with single-asset supplying and borrowing which incurs no impermanent loss. Impermanent loss is faced on DEXs (i.e. Uniswap) where two different assets are supplied in equal value and are then exposed to price volatility that can result in a greater loss for having supplied them than by simply holding them.
To supply an asset on Minterest, go to the "Markets" or "Dashboard" page and click "Supply" for the asset you want to provide. Choose the amount you want to supply and submit the transaction. Once the transaction is confirmed, your supply is successfully registered and you start earning interest. Please note that the supply of an asset requires an approval transaction.
Minterest does not impose any minimum or maximum limits on the amount you can supply. This means that you're free to provide any amount of an asset that you'd like. However, it's worth noting that for very low amounts, the transaction costs of supplying may exceed the expected earnings.
Minterest is an over-collateralized lending protocol. This means that users who wish to borrow must supply assets first which can be used as collateral to back a loan. Enabling the collateral toggle allows for that asset to be used as collateral to back a borrow position.
Yes. Once you've supplied your assets, you can choose to enable or disable using them as collateral. Simply go to the "Assets table" on your dashboard page and toggle the "collateral" switch for the asset you want to change. Please note that you can still withdraw your assets without opting out of using them as collateral, as long as they aren't actively being used to borrow and won't cause a liquidation on your loans.
When you supply assets on Minterest, you earn both market interest rate payments in the token supplied and MNT rewards in addition. MNT rewards are continuous rewards calculated based on your share of the supply amount, while interest rate payments are calculated based on the share of interest paid by borrowers. The interest rate payment is dependent on that market's utilisation rate, which is calculated based on the amount borrowed compared to the amount supplied. You can find more information about the APY and rate evolution of each asset on the market details page.