How to earn Yield at RociFi

RociFi is a decentralized liquidity protocol offering attractive yields to depositors from higher capital efficiency. RociFi’s unique feature is that it uses on-chain data to assess borrower creditworthiness and loan collateralization. This allows the platform to offer under-secured loans, a first in DeFi.

Lenders on RociFi earn yield by depositing funds into liquidity pools that users borrow from; with returns depending upon the repayment behavior of borrowers. If borrowers repay their loans, lenders can earn attractive returns. However, if borrowers do not repay their loans, lenders take a loss equivalent to the unsecured portion of the debt. In short, the protocol enables a capital exchange between borrowers and lenders where lenders are compensated for the increased risk with higher yields.

Between August and December 2022, RociFi had 1333 depositors. Over that period, the largest gains achieved were by 10 depositors that earned 25–27%; equating to 40%-43% annualized. In total, 9.37% of depositors earned more than 7% from their deposits; 11% annualized. Over 5% was earned by 177 depositors; 8% annualized. Also, 890 out of 1333, 66.7% of depositors had mild returns of 0–3%; equating to 0–5% annualized. However, 14.4% of depositors experienced losses from deposit and withdrawal timing, i.e. removing capital before full repayments; with the majority losing 1–2% or -3% annualized.

Depositors receive debt tokens on deposit. The price of a debt token increases as pool value grows and the supply of debt tokens remains constant. This would happen for instance as repayments are made on loans while debt token supply remains constant. See more

The strategy to earn with RociFi is to deposit when the debt token price is low and withdraw when the debt token price is high. The debt token price increases after repayments, and it decreases if there were defaults of under-secured loans. Therefore, tracking the debt token price is crucial to determine the best time to deposit and withdraw funds.

RociFi provides a dashboard that allows users to track the ongoing loan book with all outstanding loans, expected repayment times, LTVs, scores, and profiles of the users. Users can track this information on the RociFi credit dashboard.

RociFi — Capital-Efficient Lending Protocol on Polygon