Cross-network yield
Cross-network yield is interest paid by borrowers to those who supply assets to a lending market whose supply serves borrowers across more than one blockchain network. On SODAX, it relates to the SODAX Money Market, and yield is one of the capabilities apps offer by calling the SODAX API.
What it refers to
Cross-network yield is interest paid by borrowers to those who supply assets to a lending market whose supply serves borrowers across more than one blockchain network (often searched as cross chain yield). Suppliers deposit assets into the market, borrowers pay interest to use them, and suppliers receive that interest under the market's own rules.
"Yield" covers many sources in DeFi. This term refers specifically to lending interest from a market that spans networks.
Why this concept exists
A lending market on one network serves only borrowers on that network, so supply and demand for the same asset are split across many separate markets. When a lending market spans networks, an asset supplied on one network can serve borrowers on others, and a borrower can use collateral held on a different network from the loan. Cross-network yield names lending interest that comes from that wider market.
What this changes for system design
A lending market that spans networks has to keep one consistent account of supply, borrowing and collateral while each network confirms its part on its own schedule.
On SODAX, this ties to the SODAX Money Market, the lending and borrowing component of the SODAX system. Through apps that call the SODAX API, users can supply assets on one network and borrow on another, using cross-network collateral. Yield is one of the capabilities apps offer by calling the SODAX API, alongside trading, lending and borrowing, and cross-network transfers.
Related terms
- Money Market: the SODAX lending and borrowing component
- Cross-network lending: lending across network boundaries
- Cross-network collateral: collateral on one network, loan on another
- SODAX API: yield is one of its capabilities
- Liquidity fragmentation: why single-network markets split supply