> For the complete documentation index, see [llms.txt](https://docs.noon.capital/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.noon.capital/3.-the-yield-engine/yield-strategies/defi-lending.md).

# DeFi Lending

Part of the yield engine. Approved by governance; discussion and analysis on the governance forum.

## <mark style="color:$primary;">What is DeFi Lending</mark>

<mark style="color:purple;">**Noon**</mark> deposits $**USDC and $USDT** into curated, over-collateralised lending vaults. Borrowers post permitted collateral on an over-collateralised basis, and interest rates adjust algorithmically with utilisation. [**Morpho**](https://morpho.org) and [**Euler**](https://www.euler.finance/) are the permitted venues, through curated vaults managed by professional risk teams such as [**Gauntlet**](https://gauntlet.xyz) and [**Steakhouse**](https://www.steakhouse.financial/).

Every position is publicly visible on-chain, held in an institutional-grade MPC wallet via **ForDefi**, which makes this one of the most independently verifiable strategy in the basket.

## <mark style="color:purple;">Noon</mark> <mark style="color:$primary;">Deployment Analysis: Summary</mark>

<figure><img src="https://3816918787-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FL26rQzcNmiUZrCXkxkjS%2Fuploads%2FzaSR5ZhYdlDAgye5QxJQ%2FNOON%20Deployment%20Analysis%20DeFi%20Lending.png?alt=media&amp;token=16bdf36a-ab54-4c93-afea-475cd2550f42" alt=""><figcaption></figcaption></figure>

## <mark style="color:$primary;">Return generation mechanism</mark>

Borrowing demand on major money markets is persistent, and stablecoin lending earns that demand without taking directional price exposure. Rates float: they can spike when demand surges (one monitored vault briefly reached an APY of 46.22%, a transient spike rather than a sustainable level) and compress when demand fades. The strategy is evaluated on sustainable net rates.

## <mark style="color:$primary;">Documents</mark>

* A full risk assessment can be found archived in <mark style="color:purple;">**Noon's**</mark> [**Governance Forum**](https://forum.noon.capital/t/risk-assessment-jaaa-clo/25/10)
* Primer: [**DeFi Lending Primer**](https://596450103-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FvawK0RJiR8PpG791Q3EH%2Fuploads%2Ff1lmlb0aPHUaHq5eNvGq%2FDefi%20Lending%20Primer.pdf?alt=media\&token=01bf1fd6-4a4b-4633-885f-35a0fe45e43b)