Lending protocols run decentralized credit markets where borrowers deposit collateral to withdraw assets, generating interest paid to depositors. By tapping into interest rate spreads or liquidation mechanics, these platforms can divert micro fractions of capital back to foundational protocol security.
Reserve Factor / Spread Redirect
Definition. A set percentage of the protocol’s Reserve Factor (the spread accumulated by the protocol between what borrowers pay and what lenders earn) is redirected to a Commons.
Value-stack tap. Smart contract surface (pool interest accumulation logic).
Cost-bearer class. Project paid / LP-borne, surplus (derived from the protocol treasury’s native revenue buffer).
Example protocols. Aave v3, Morpho Blue, Fluid.
Value flow.
Liquidation Penalty Surcharge
Definition. A micro-slice of the liquidation bonus (the premium paid to searchers who liquidate undercollateralized accounts) is captured programmatically during the liquidation execution by bots.
Value-stack tap. Execution surface / Market (liquidation bots).
Cost-bearer class. User paid (extracted from the defaulting borrower’s liquidation penalty margin).
Example protocols. Compound v3, Spark Protocol.
Value flow.
Flash Loan Premium Redirect
Definition. Many lending protocols charge a premium on flash loans. That is a loan with zero duration that must be borrowed and fully paid back within a single, atomic transaction block. These loans can be coupled with a surcharge to flow to a CaaS rail.
Value-stack tap. Smart contract surface.
Cost-bearer class. User paid (surplus-funded from flash execution profits), Project paid / LP-borne (already charges from loans is skimmed off but this will be borne as majority of the fees were supposed to go to LP)
Example protocols. Aave, Euler
Yield Bearing Collateral (Yield Skim)
Definition. As lending markets increasingly rely on yield bearing assets (like Liquid Staking Tokens or yield stablecoins) as collateral, the protocol natively holds these assets. A micro percentage of the accruing yield generated by the locked collateral is skimmed programmatically as a custody or convenience fee before the collateral is eventually unlocked.
Value-stack tap. Product wrapper / Execution surface
Cost-bearer class. User paid (borrowers forfeit a microscopic fraction of the passive yield their collateral generates while locked to secure their loan).
Example protocols. Spark Protocol (sDAI collateral), Fluid, Aave v3 (stETH/wstETH loops)