# How does yield on Suilend work?

In this article we'll explain how yield works in lending protocols like Suilend and why it's considered a reliable yield source in DeFi.

### Where does the yield come from?

<figure><img src="/files/Ury7Y880Ykn3zelCmV4B" alt=""><figcaption><p>Depositing into the USDC pool on the Suilend main market.</p></figcaption></figure>

When you deposit on Suilend, you’re supplying liquidity to a shared pool. Borrowers take loans from that same pool by posting collateral.\
\
The interest borrowers pay becomes the yield depositors earn, minus a small protocol fee, usually 20% of the borrow interest rate, called the interest rate spread.

### Utilization

<figure><img src="/files/4dqDZCY1oCh2ongrCMCI" alt=""><figcaption></figcaption></figure>

Lending rates revolve around one key metric: utilization.&#x20;

* If utilization is low: liquidity is abundant, then rates stay low.
* If utilization is high: liquidity is scarce, then rates rise to attract deposits.

Suilend uses a dynamic interest rate curve to set rates automatically.

### What happens when rates rise?

When liquidity gets tight, interest rates rise.

This discourages excessive borrowing and rewards depositors with higher yields - keeping the market in balance.

As seen below: USDC rates spiked but quickly reverted to the average 9.7% APR as liquidity returned.

<figure><img src="/files/nOO5lO4VaLvy8oaQxJcy" alt=""><figcaption></figcaption></figure>

### How do I check pool parameters?

<figure><img src="/files/DvVTi3w8LLqJkN2yRoZe" alt=""><figcaption></figcaption></figure>

As a reminder - all parameters on Suilend are fully transparent and accessible onchain.

Explore each pool’s data - from interest rate curves and utilization to reserve factors and related objects - directly on the app.

### Yield on Suilend

Deposit interest on Suilend comes directly from onchain borrowing activity - fully transparent on Sui.

No external fund managers. No backroom deals.

Just borrowers paying interest and depositors earning it. That's real yield.


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