BiFi Cross-chain Guide
  • 📓BiFi Cross-chain
    • Overview
    • 한국어 가이드
  • 🏦How to use BiFi
    • Connect Wallet to BiFi
      • Pockie Guide
      • Metamask Guide
        • Install MetaMask
        • How to Add Custom network
        • How to Add custom token
    • Lend & Borrow
    • Repayment and Withdrawal
  • 🪙Token Purchase
    • Buying BFC or BiFi on (CEX, DEX)
    • Gas Top-Up
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  1. BiFi Cross-chain

Overview

NextConnect Wallet to BiFi

Last updated 1 month ago

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BiFi is a cross-chain lending platform operating on Bifrost Network. As DeFi platform, the deposit APY and borrowing interest rate are adjusted in real-time according to market supply and demand.

1. The Relationship between Supply APY & Borrow APY

As a DeFi lending platform, supply APY and borrow APY are determined by the users. When there are more deposited assets and low borrowing demand, they supply APY decreases. On the other hand, when borrowing demand increases, which lead decrease in liquidity, will cause the supply APY to increase. Basically the supply APY and borrow APY are determined by the supply and demand of the liquidity in BiFi.

2. When Supply APY is shown as 0%

In BiFi, the supply APY for some tokens may appear as 0% due to the following reasons:

  • Lack of Demand: If there are few or no users borrowing a specific token, no interest rate is generated for the deposited assets.

  • Low Liquidity: When the amount of a token borrowed in minimal, or users repay loans and immediately redeposit, liquidity remains stagnant.

  • Market Volatility: The DeFi market is highly volatile so even if the supply APY is 0% at certain moments, it adjusts dynamically when demand arises.

3. Principles of Loan Liquidity and Market APY Fluctuations

The supply APY and borrowing interest rates fluctuate based on the following market conditions:

Condition
Expected Change

Increased borrowing demand

Supply APY rises & Borrowing rate rises

Decreased borrowing demand

Supply APY falls & Borrowing rate falls

Surge in loan repayments

Supply APY falls

Surge in deposited assets

Supply APY falls

Reduced liquidity (increased withdrawals)

Borrowing rate rises

Thus, the BiFi market is automatically adjusted in real time based on user behavior and liquidity changes.

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