AMM Pools & Yield Strategies

Overview

Polaris Pay's capital efficiency is powered by internal AMM pools and yield strategies. These ensure that liquidity is always available for swaps and that underutilized assets are earning interest to service the protocol's credit lines.

AMM Pool Configuration

We provide several fixed-constant product AMM pools for fast asset swaps between collateral and borrowable assets.

Yield Generation

Assets deposited in the Polaris Lending Pools are not sitting idle. They follow automated yield-harvesting strategies:

1. Lending Demand: Assets are primarily lent to other users for a dynamic interest rate based on the supply/demand curve.
2. External Vaults: If local demand is low, the PoolManager can route excess capital into external yield aggregators or blue-chip money markets (e.g., Aave or Compound).

Servicing Credit with Yield

The unique value proposition of Polaris Pay is that interest-free credit is serviced by the yield generated by your collateral.

• When you deposit $1,000 in WETH, the protocol initiates a yield-generating position.
• If the WETH generates 5% APR, that yield ($50/year) is automatically applied to pay down any outstanding credit balance you have.
• This creates the world's first "self-repaying loan" for consumer commerce.

Protocol Fee Structure

To maintain the protocol and reward liquidity providers, Polaris Pay collects minimal fees:

• Swap Fee: 0.3% per swap (distributed to LPs).
• Lending Spread: A 10% cut of generated interest is redirected to the InsurancePool to secure the protocol against bad debt.

For liquidity provider onboarding, see the Developer Guide.