For Lenders#
Complete guide to earning yield on Coalesce Finance.
Overview#
As a lender, you:
- Deposit USDC into markets
- Earn fixed interest over time
- Withdraw after maturity
- If you withdrew at a loss and the borrower later repays more, recover the difference via
claim_haircut
Finding Lending Opportunities#
Join the Coalesce Finance Telegram channel at t.me/coalescefi for new lending opportunities, market announcements, and protocol updates.
Deposits#
Onchain Transactions#
When you deposit, your USDC is sent to the loan market and you receive shares (a scaled balance). Your share count stays constant while the scale factor grows to reflect accrued interest. See Protocol Calculations for exact conversion formulas.
Deposit Errors#
Common failures are listed in Error Codes.
Position Details#
Each position shows:
| Field | Description |
|---|---|
| Market | The market you deposited into |
| Borrower | Who's borrowing the funds |
| Deposited | Your original deposit amount |
| Shares | Your scaled balance |
| Current Value | Deposit + accrued interest |
| APR | Annual interest rate |
| Maturity | When you can withdraw |
Withdrawals#
Your funds are locked until maturity. No withdrawals are allowed before the market's maturity date — there are no exceptions and no early exit. Make sure you are comfortable with the maturity date before depositing.
After maturity, the first settlement-triggering withdrawal or borrower force-close must wait for the 5-minute grace period; that action computes and locks the settlement factor.
Steps#
- Go to "My Positions" and find the matured market
- Review the settlement factor (determines your actual payout)
- Optionally set a minimum acceptable payout (slippage protection)
- Click "Withdraw" and approve the transaction
- Verify USDC received in your wallet
Payout Calculation#
Your payout depends on interest accrued and the settlement factor. See Settlement and Protocol Calculations for exact formulas and examples.
Withdrawal Errors#
Common failures are listed in Error Codes.
Haircut Recovery#
If you withdraw from a distressed market (settlement factor below 100%), you receive less than your full entitlement. The gap is not permanently lost — it is tracked on your position.
When Can I Recover?#
If the borrower repays more after your withdrawal and someone calls re_settle to improve the settlement factor, you can call claim_haircut to recover a proportional share of your loss.
Steps#
- Check whether the market's settlement factor has improved since your withdrawal
- Call
claim_haircut(or the borrower can callforce_claim_haircuton your behalf) - Receive tokens proportional to the settlement factor improvement
- If the factor improves again later, repeat to recover more
How Much Do I Get Back?#
The recovery is proportional to the settlement factor improvement relative to the remaining gap:
claimable = haircut_owed * (current_sf - withdrawal_sf) / (WAD - withdrawal_sf)
If the settlement factor reaches 100%, you recover your full original haircut. See Haircut Recovery for a worked example.
Risks#
Borrowers may not repay their loans, leading to a loss of deposited funds.
As a lender, you take on the credit risk of the borrower. You may lose your entire deposit if the borrower defaults. Research the borrower fully and don't deposit more money than you are comfortable losing.
A full list of risks can be found in Risks.