How fixed-rate stablecoin lending works
Lend USDC or USDT for a fixed term and a fixed rate. This guide explains where the yield comes from, how terms and early withdrawal work, and the risks you are taking.
By Luindy Editorial8 min read
Most crypto yield is variable. The rate you see today can be half that tomorrow, and it is often unclear what is generating it. Luindy's lending product is different in one important way: the rate is fixed for the term you choose. If you lock in 6.5% for a year, you earn 6.5% for a year. This guide explains the machinery behind that promise.
The basic loop
- You deposit USDC or USDT into a fixed-term position: 30, 90, 180 or 365 days.
- Your stablecoins are lent to Luindy borrowers whose loans are secured: against documented assets such as gold, or against a reviewed project, under a signed agreement.
- Borrowers pay a fixed interest rate. Most of it is passed to lenders; a spread covers operations and a reserve fund.
- At maturity, your principal and interest are returned to your wallet automatically. On 180 and 365-day terms, interest is paid monthly.
Why the rate can be fixed
Because both sides of the market commit to terms. A borrower taking a 90-day loan at a fixed APR gives Luindy a predictable interest stream; that stream is matched against 90-day lender positions. We hold a liquidity buffer and a reserve fund to handle mismatches and early withdrawals. This is the same principle a bank uses to offer a fixed-term deposit, applied to secured stablecoin loans.
Where the yield comes from, precisely
Only one place: interest paid by Luindy borrowers. We do not deposit your funds into third-party DeFi protocols, we do not trade with them, and we do not lend them unsecured to market makers. If borrower demand falls, our rates fall for new positions; existing positions keep their locked rate.
Terms and early withdrawal
| Term | Interest paid | Early withdrawal |
|---|---|---|
| 30 days | At maturity | After 7 days, interest forfeited |
| 90 days | At maturity | After 7 days, interest forfeited |
| 180 days | Monthly | After 7 days, current month's interest forfeited |
| 365 days | Monthly | After 7 days, current month's interest forfeited |
Longer terms pay more because they give the matching engine more certainty. Early withdrawal is always possible after the first week; you just give up the interest for the period you break.
The risks, named
- Borrower default. An asset-backed borrower could miss repayments. Careful review, a signed agreement and recovery against the asset reduce this, and a reserve fund exists to absorb losses, but they cannot remove the risk entirely.
- Stablecoin de-peg. If USDC or USDT lost its peg, your position would be worth less in dollar terms. Read USDT vs USDC for history.
- Operational or smart-contract failure. Bugs and infrastructure compromise are the classic crypto risks. Our security page describes the controls.
- Luindy insolvency. Customer positions are segregated from operating funds, but Luindy is a company, and companies can fail.
A worked example
You lend 10,000 USDC for 365 days at an illustrative 6.5%. You receive roughly 54 USDC each month, about 650 USDC over the year, and your 10,000 USDC principal returns at the end. If you withdrew on day 200, you would receive your principal plus the interest already paid for completed months, minus the current month's accrual.