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Money Market Margin

The Money Market Margin feature allows users to engage in both earning and borrowing activities simultaneously, leveraging their deposited assets for enhanced liquidity without losing access to high APYs.

Balancing Yield and Debt​

The feature capital seesaw allows users to participate in both sides of the market and to leverage their deposited assets without fully locking them up or sacrificing their ability to borrow against them:

  1. Earning Side: Users deposit assets into Concrete’s vaults, which are then used to generate yields through various strategies, often reaching competitive rates such as 20% APY.
  2. Borrowing Side: Simultaneously, the same users can use their tokenized vault receipts (e.g., Concrete wBTC) to borrow stablecoins or other assets, adding another layer of liquidity to their portfolio.

Borrowing Against Vault Receipts​

After users deposit assets into a vault, they receive a receipt in the form of Concrete wBTC (or another relevant token). This receipt serves as proof of their deposit and can be further utilized within Concrete’s money market, enabling additional borrowing.

This setup allows users to maintain liquidity while maximizing returns on their initial investment. They can borrow stablecoins or other assets, creating a dynamic interplay between yield generation** and debt management.

For example:

  • A user deposits 10 ETH into a vault, which is earning 20% APY.
  • The protocol issues them a receipt (e.g., Concrete ETH (ctETH)), which represents their deposit.
  • The user can then borrow stablecoins (such as USDC or USDT) against this receipt at a specific loan-to-value (LTV) ratio (e.g., 40% LTV).
  • Even though the user has borrowed funds, their original deposit continues earning the 20% APY.

Revenue Distribution (Paying Off Debt with Yield)​

One of the key aspects of this strategy is that users never have to worry about servicing their debt manually. The yield generated by their assets can automatically be used to pay off the interest on their borrowed funds.

This makes the borrowing process frictionless and efficient, optimizing returns while maintaining liquidity.

For example:

  • If a user borrows stablecoins at a 7% APR and their deposit is earning a 20% APY, they can cover the borrowing cost with a portion of their yield while still profiting from the remaining 13% APY.
  • This setup ensures users can maintain liquidity and cover their debt obligations without needing to continuously monitor their position or transfer funds to service the loan.

Automated Debt Servicing​

Concrete aims to ensure that all borrowing costs are covered by the profits generated through yield strategies, further simplifying the user experience. The system is designed so that users can "set it and forget it," knowing that their debt will be paid automatically by their yield, while they retain access to the liquidity needed for other opportunities.