How to Combine Borrowing and Supplying to Maximize Rewards

Teller enables both supplying and borrowing within the app. Supplying assets earns APY, while borrowing against collateral earns borrower rewards. Using both features together creates opportunities to earn more than from a single activity.

Supplying Assets

Supplying is simple: deposit tokens into a Teller pool, earn interest and rewards. The more liquidity is in a pool, the more that interest gets shared and so APY adjusts.

This supply side provides steady income.

When a user supplies USDC to the pool, they can earn up to 18.16% APY.
Note: Every Teller pool has different APY returns.

Supplying assets to Teller pools generates base yield and borrower-paid interest. Beyond standard yield, liquidity providers can extend their participation further as they can stake their pool shares to earn extra rewards yield. Staked shares can also serve as collateral for borrowing, enabling loans to be taken while continuing to earn both staking and borrower rewards.

Borrowing Against Collateral

Use your supplied assets as collateral to borrow another token, which can then be spent, swapped, or reinvested while also earning borrower rewards.

Borrowing involves cost (interest + any fees), so net gain depends on how reward incentives compare to those costs. Done smartly, borrowing can amplify returns beyond supply alone and while rewards vary by pool, it can offset the cost of borrowing.

Use any token such as $WBTC as collateral to borrow USDC.
Note: All Teller loans are perpetual without liquidations.

Combining Both

By supplying one token and borrowing another, users can earn yield on supplied assets and rewards on borrowed assets. Borrowed tokens can also be deployed in other DeFi strategies for additional returns.

Example Scenario

• Depositing 1,000 USDC into a Teller pool earns an 18.14% APY—comprising 8.21% base yield plus 9.93% staking rewards—amounting to an estimated 181.45 USDC over a year.

• Borrowing 25,000 $USDC against supplied token (.33 $WBTC) carries a 1.43% interest rate—2.74% base minus 1.32% staking reward—earning an estimated .003 $WBTC over each rollover checkpoint.

• Earn interest on USDC supply while receiving borrower rewards on the WBTC loan.
• Net effect: dual-source rewards and potential yield stacking.

Things to Monitor

This combined strategy has risks and moving parts. Here’s what to keep an eye on:

• Pool Utilization & APY Shifts: More borrowing can increase reward but reduce supply-side yield via utilization changes.
• Rollover Checkpoints: When loans roll over, repayments reset parts of the equation. Rewards and interest recalculation at these points can affect returns.
• Debt Thresholds: Each pool limits how much can be borrowed (a percentage of total liquidity). If the threshold is hit, borrowing stops, which can limit leverage.

Takeaway

Combining borrowing and supplying on Teller maximizes rewards and capital efficiency. Understanding APY shifts, debt thresholds, and rollover checkpoints allows both lenders and borrowers to get the most out of each position.

Glossary Table

About Teller

Teller enables loans for Bitcoin and 100+ alts. Combining borrowing and supplying on Teller creates dual rewards and a flexible way to increase total returns over time.