Sui (SUI) blockchain ecosystem lending protocol Scallop revealed plans to enter its testing phase in the upcoming week, relocating SUI supply rewards, resulting in an increase of the SUI borrow incentives.
Scallop’s interest rate model consists of three distinct stages, where the interest rate for each stage is determined by varying levels of fund utilization. As borrowing rates rise, utilization rates also increase, consequently leading to elevated interest rates for individuals providing assets on the Scallop platform.
During the initial week starting April 29th, both supply and borrow rewards will constitute 50% each. In addition to the SUI reward, borrowers on Scallop have the opportunity to qualify for SCA Boosted Borrow Incentives, potentially receiving up to four times the annual percentage rate of their borrowings. Notably, lenders will continue to receive SCA incentives as usual.
Furthermore, the borrowing fee will be adjusted, increasing from the current rate of 0.1 to 0.3, with this modification taking effect from April 29th. VeSCA holders will have the opportunity to engage in revenue sharing, allowing them to receive a portion of the protocol revenue as a direct reward for their staking activities.
Scallop Feature – Borrowing IncentivesEnjoying Scallop's juicy Borrow Incentives so far?Next week, Scallopers will be able to enjoy EVEN MORE incentives when they borrow!Scallop will be increasing the SUI Borrow Incentives gradually by reallocating from SUI Supply… pic.twitter.com/yxfUK5JgwX
— Scallop (@Scallop_io) April 25, 2024
Scallop To Boost Sui’s DeFi Liquidity
Scallop serves as a peer-to-peer money market within the Sui ecosystem and operates as a decentralized finance (DeFi) protocol backed by the Sui Foundation. It provides various features, including lending and borrowing, lending derivatives, Sui PTB building tools, flash loans, SDKs, and a user interface for swaps and bridges.
Sui stands as a Layer 1 decentralized proof-of-stake (PoS) network featuring horizontally scalable throughput and storage capabilities, enabling rapid and cost-effective development of applications.
The recent adjustment addresses a challenge within the Sui lending space, where an abundance of idle assets has emerged due to an excessive focus on supplying or locking up assets, which has led to a decrease in the vibrancy of the DeFi space, stemming from a shortage of freely circulating liquidity.
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