How Iron Bank Works

Welcome to this post, where we are going to see how Iron Bank, the main lending & borrowing platform in the Fantom network, has launched Yearn Finance.

Yearn Finance is one of the leading platforms in DEFI with different strategies and options they have on their platform. And with the launch of Iron Bank, they already have their own integrated lending marketplace, on the Fantom, Ethereum and Avalanche network.

What is Iron Bank

The Iron Bank offers a lending service to both users and protocols. For protocols that are whitelisted, it can be unsecured loans. For users, it is a loan with overcollateral.

The operation is very similar to AAVE, but with the difference that you will be able to find more assets and different annual % on the Fantom, Ethereum and Avalanche network. So it may be more interesting to compare if in Iron Bank you can get better annual %, both for depositing and borrowing any cryptocurrency.

Iron Bank focuses on lending to other protocols without the need to provide collateral. Although only to protocols that have been verified by the team, to avoid not paying back the loan. Although for a normal user, you will need to provide collateral to borrow. The main advantage of lending without providing liquidity between protocols, is that they have a lot of liquidity that is used, and, therefore, sometimes there is not enough liquidity in some cryptocurrency. As there is more utilization of the loans, it maximizes the annual % that it can generate for the depositors. Although it is a platform for protocols, it also has a utility for a normal user and can be used in the same way as AAVE or other lending platforms.

Iron Bank can be found both on yearn.finance and on its own site at app.ib.xyz, but the two sites are the same platform. From yearn.finance you can use Iron Bank, and if you want to focus only on the platform, it is better to go to the other site.

Markets

In markets you can find all the information about the platform. In this case, we will focus on the Fantom network, although the operation is the same in the Ethereum or Avalanche network. But it is the main one of the protocol.

Here, you will be able to see the TVL or total locked value that is on the platform and on that network, in addition to the reserves that the platform has. Below, the total that is deposited, and the total that has been borrowed in total borrow. In addition to seeing the 3 tokens that are most used, both in deposits and loans.

If you scroll down, you can find all the information for each token. Starting with the beginning which token it is, the current liquidity, the current liquidity of that token, the % for depositing the token, the amount borrowed of that token, and finally the annual % for borrowing that token.

You can see this information for each token available to deposit and borrow at Iron Bank, and you can easily compare the annual % you receive, which tokens have the most liquidity and which tokens may lack liquidity or have the most liquidity in use.

Lending

In lending we will go to deposit our tokens, either to get that annual %, or to use it as collateral and borrow another token. Here, unlike the markets panel, you can find two annual %, supply apr and APY rewards. This is because the platform incentivizes you to deposit in it, and therefore you will receive the annual % of supply apr and the annual % in APY rewards. So I recommend you look at both to see which token may be more interesting to deposit.

Once you have decided which token you want to deposit click on it. First you must click on approve and confirm in your wallet. With the token approved, the next thing to do is to indicate the amount you want to deposit. You can use the bar below to indicate a % of the total amount you have available.

Below, you will see the annual % received for depositing, both the supply and the % of rewards. Below is the collateral factor, which is the amount you can borrow against the token. If you deposit 100 USDC, and the factor is 75%, you will only be able to borrow $75 of the token you want. If the value of the token you have borrowed exceeds 75% of the value of the token you have deposited, your position will be liquidated. Finally, click on supply, confirm in your wallet and you’re done.

After depositing, you must click on register to be able to use your tokens as collateral and borrow.

Borrow

To borrow, once you have deposited funds and clicked register and confirmed in your wallet, you are ready to borrow another token from Iron Bank.

Now, click on the cryptocurrency you want to borrow. Here, above you will see in borrow limit the maximum you can borrow of that token. Indicate the amount, keeping in mind that if it exceeds 75%, your position will be liquidated. Here it depends on the risk you want to take, what % to indicate, either 20% if you are conservative or 50% if you want to take more risk.

With the amount you want to borrow indicated, just click on borrow and confirm in your wallet. In this simple way you will already have in your wallet the token you have borrowed.

Now, if you go up, you will be able to see aspects such as the amount you have deposited, the annual % you will have to pay or you are earning, usually if you have borrowed it will be negative. The amount you have borrowed and the % limit of your loan.

Portfolio and Reward

Here, you will be able to monitor all your positions and see the transactions made in Iron Bank. Quite useful to avoid being liquidated and to be able to manage your cryptocurrencies and loans from here.

Besides being able to access the history in case you make many deposits and loans and need to have a history. Also, from here you can see the rewards in the token of the platform, IB, that you have been generating with your deposits and click on claim all to claim them.

I hope this has helped you to learn how Iron Bank, the main money market of the Fantom network, works. Remember that if you don’t have an account with binance, you can create one below.