Supply Restaking

Our LP is built directly on top of other variable-rate lending protocols including Morpho, AAVE, Compound, Venus, Euler, and more. Users with existing earn/supply positions can simply restake their position to enable others to lend/borrow at fixed-rates on top and earn additional yield. This is our killer feature.

What does Supply Restaking Mean?

Supply restaking on Spine Protocol lets you maximize the potential of your existing yield-earning assets by redeploying them as liquidity in our lending pools. Instead of letting your USDC sit idle on another platform (like simply earning on Morpho, for example), you can use it to support fixed-rate lending and borrowing markets, and in turn, earn extra yield.

Here’s how it works:

Restake Your USDC: You choose an amount of USDC from your current positions to redeploy in Spine’s Lending Liquidity Pools. This reallocation allows your asset to continue earning its original rewards while also supporting additional lending activities.
Automatic sBOND Minting: To facilitate fixed-rate operations, the protocol automatically mints sBOND tokens based on current market prices. The required amount of sBOND is calculated using the pool’s USDC/sBOND ratio, ensuring that the pool remains balanced.
Paired sBOND Mechanism: Instead of purchasing sBOND outright, a pair of tokens is minted—a positive and a negative sBOND. You deposit your USDC along with the positive sBOND into the pool, while retaining the negative sBOND in your portfolio. This process enables you to contribute liquidity without needing to convert your assets directly into sBOND.
Supporting Fixed-Rate Lending and Borrowing: Your restaked position acts as the foundation for others to lend, borrow, and engage in yield trading at fixed rates. By doing so, these activities generate additional yield on top of your LP position, creating extra revenue streams from trading fees and the spread between borrowing and lending rates.
A Practical Example: Suppose you restake 100 USDC into a pool designed to maintain a 50/50 ratio between USDC and sBOND. The protocol mints +100 sBOND tokens to pair with your USDC. Your combined deposit of 100 USDC and 100 positive sBOND is then used in the pool, and you receive liquidity tokens that represent your share of the pool. Meanwhile, the fixed-rate trading activity on your LP position generates extra yield.

In summary, supply restaking not only allows your assets to earn their original rewards, but also enables additional income by letting others lend, borrow, and yield trade at fixed rates on top of your liquidity pool positions.

Why Restake your Supply Positions?

LP providers earn from 3 main sources:

Liquidation fees: Any liquidation occurs will incur fees. These fees will go to LP providers of the respective pools.
Lending and Borrowing fees: the difference between total interest paid and total interest received. Spine is designed to always have more borrowing compared to lending.
Yield-Trading fees: As users yield-trade through entering/exiting their positions and swap maturity dates, the fees incurred will go directly to LP providers.
Retain all Existing Earning Yields: through our models, idle liquidity that are not earning users additional yields are still earning the base yield from whatever protocol you are restaking.

How often can users withdraw assets?

You can withdraw your restake assets anytime you want after providing liquidity. However, remember that there might be impermanent losses on your positions based on market bond prices.

What is the transaction fee?

There are zero transaction fees when depositing into or withdrawing your LP positions out of liquidity pools.

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Last updated 1 month ago

What does Supply Restaking Mean?

Here’s how it works:

Restake Your USDC: You choose an amount of USDC from your current positions to redeploy in Spine’s Lending Liquidity Pools. This reallocation allows your asset to continue earning its original rewards while also supporting additional lending activities.

Automatic sBOND Minting: To facilitate fixed-rate operations, the protocol automatically mints sBOND tokens based on current market prices. The required amount of sBOND is calculated using the pool’s USDC/sBOND ratio, ensuring that the pool remains balanced.

Paired sBOND Mechanism: Instead of purchasing sBOND outright, a pair of tokens is minted—a positive and a negative sBOND. You deposit your USDC along with the positive sBOND into the pool, while retaining the negative sBOND in your portfolio. This process enables you to contribute liquidity without needing to convert your assets directly into sBOND.

Supporting Fixed-Rate Lending and Borrowing: Your restaked position acts as the foundation for others to lend, borrow, and engage in yield trading at fixed rates. By doing so, these activities generate additional yield on top of your LP position, creating extra revenue streams from trading fees and the spread between borrowing and lending rates.

A Practical Example: Suppose you restake 100 USDC into a pool designed to maintain a 50/50 ratio between USDC and sBOND. The protocol mints +100 sBOND tokens to pair with your USDC. Your combined deposit of 100 USDC and 100 positive sBOND is then used in the pool, and you receive liquidity tokens that represent your share of the pool. Meanwhile, the fixed-rate trading activity on your LP position generates extra yield.

Why Restake your Supply Positions?

LP providers earn from 3 main sources:

Liquidation fees: Any liquidation occurs will incur fees. These fees will go to LP providers of the respective pools.

Lending and Borrowing fees: the difference between total interest paid and total interest received. Spine is designed to always have more borrowing compared to lending.

Yield-Trading fees: As users yield-trade through entering/exiting their positions and swap maturity dates, the fees incurred will go directly to LP providers.

Retain all Existing Earning Yields: through our models, idle liquidity that are not earning users additional yields are still earning the base yield from whatever protocol you are restaking.