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How Lending Works

Stake DAO Lending lets you borrow against curated strategy positions without exiting yield. Your collateral stays staked in its native vault, but a wrapper token makes it acceptable to a lending protocol.

The Main Pieces

  • RewardVault: The Stake DAO strategy vault where your LP tokens are staked and rewards accrue.
  • Wrapper: A non-transferable ERC20 token that represents your staked position 1:1.
  • Lending protocol: Holds the wrapper as collateral and tracks your borrow.
  • Oracle: Prices the LP collateral conservatively using Curve EMA data and Chainlink feeds.
  • Liquidation module: Helps liquidators unwrap seized collateral when positions are liquidated.

The Collateral Lifecycle

Wrap

You deposit RewardVault shares or raw Curve LP tokens. The wrapper mints a 1:1 token and supplies it as collateral.

Borrow

You borrow the market's loan asset against your collateral inside the lending protocol.

Accrue rewards

Your position continues to earn rewards while collateralized.

Repay and withdraw

You repay your debt and withdraw collateral. The wrapper burns its tokens and returns your RewardVault shares.

Why the Wrapper Matters

The wrapper token is the key to keeping rewards intact:

  • Reward-aware: It checkpoints reward integrals so you keep earning while the wrapper sits in the market.
  • Reward preservation: Continue earning until the moment your position is liquidated. The rewards are never lost.
  • 1:1 backed: Each wrapper token represents one RewardVault share.
  • Non-transferable: Only the lending protocol can move wrapper balances. This prevents approval phishing and keeps accounting deterministic.

How Rewards Continue

Stake DAO strategies use integral-based accounting. The wrapper mirrors this logic and tracks per-user checkpoints for:

  • Main rewards (e.g., CRV)
  • Extra rewards (additional incentives emitted by the gauge)

You can claim rewards at any time through the wrapper, even while your collateral is supplied.

Pricing and Risk Controls

Collateral pricing relies on on-chain market data:

  • Curve EMA prices and virtual price provide conservative LP valuation
  • Chainlink hop feeds convert the pool denomination into USD and then the loan asset
  • Heartbeat checks reject stale feeds, preventing outdated prices

This approach favors safety over maximum valuation, which helps reduce bad debt during volatility.

Liquidations (What Happens)

If your position drops below the liquidation threshold, part of your collateral is seized to repay debt. Two important points:

  • You keep rewards earned up to liquidation.
  • The seized amount stops accruing rewards immediately.

Supported Markets

Only a small set of curated strategies are enabled for lending at launch. Each market is configured with:

  • A specific strategy collateral
  • A loan asset selected per market
  • A defined liquidation threshold and interest rate model

Check the Stake DAO app for the current list of available markets.