> For the complete documentation index, see [llms.txt](https://stackfi-2.gitbook.io/stackfi-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://stackfi-2.gitbook.io/stackfi-docs/pools-and-apy.md).

# Pools and APY

Non-custodial. No impermanent loss. Isolated. Organic rates. No liquidations.

Stackfi passive lending is similar to Compound or Aave, but with composable leverage benefits and isolated risks.

How it Works:

* Lend a single asset to a pool (e.g., USDC, WAVAX, WBTC)
* Earn APY from borrowers using leverage via Credit Accounts
* No impermanent loss, no liquidations for lenders
* Multiple pools per asset, each with different AllowedLists

sTack Tokens (sTokens):

* ERC-4626 yield-bearing pool tokens (e.g., sUSDC, sAVAX)
* Automatically accrue interest
* Rewards (e.g., Stack tokens) accrue to staked sTokens
* Claim extra token rewards manually

Where Does Yield Come From?

1. Utilization Curve:

* Two-tick model smooths rates to prevent volatility.
* APY increases with utilization ratio.
* r(t) based on U1, U2 thresholds (see table in docs)

Example USDC Pool Rates:

* r0 = 0%, r1 = 1%, r2 = 1.25%, r3 = 100%
* U1 = 70%, U2 = 90%

1. Gauges (Extra Interest):

* Distributed between pools & DAO
* Dynamic source of income

1. STACK Token Rewards:

* Distributed to staked sTokens
* Must be manually claimed

Lending on StackFI is simple, passive, and powerful. Try supplying liquidity and earn real yield.