Docs/Lending/Yield mechanics

Yield mechanics

Where the APY actually comes from. Two revenue streams, one rate per pool, paid in the asset you deposited.

● Last updated May 08, 20264 min read

Overview

Atomic runs a separate lending pool for each supported asset (USDC.e, WETH, WBTC, ARB, GMX, LINK, UNI). Each pool has its own APY, calculated bottom-up from real protocol revenue tied to that asset. No token rewards, no inflationary subsidies, no smoothing. The rate floats with trader activity, per pool, in real time.

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The formula, simplified

Pool APY ≈ (lender share of 24h fees on that pool) ÷ pool TVL, annualised.

Two yield sources

Protocol trading fees

Every trade pays 20 bps round trip (10 bps open, 10 bps close). A share of that goes back to whichever pool financed the leveraged portion of the trade.

A trade that borrows ARB to short ARB/USDC sends its share to the ARB pool's lenders. A trade that borrows USDC.e to long ETH sends its share to the USDC.e pool. The pool fees follow the asset that was actually borrowed.

Pool routing fees

The capital in each pool ends up routed across Arbitrum DEXes (Uniswap V3, Camelot, Curve and the rest the aggregators reach) on every position open and close. As an LP-adjacent participant in those routes, the pool earns its share of the underlying swap fees.

This stream is steadier than direct trading fees but smaller in magnitude. It runs whenever the pool is being used, even on quiet days.

Lender share

Across all pools combined, lenders receive 25% of platform revenue. The other ~75% covers development, audits, the bounty and ongoing operations. No team-only line item takes precedence over lender payouts.

The 25% isn't split evenly across pools - it tracks the activity each pool actually finances. A pool that backs a heavily traded pair gets more of the share than one backing a quiet market.

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Why 25%

The split is set to keep lender APY competitive with other Arbitrum yield venues (Aave, Pendle, etc.) while still funding the protocol's ongoing work. It gets reviewed against actual cost data periodically.

How accrual works

Yield accrues to each depositor's balance continuously, block by block, in the asset they deposited. No claim transaction, no harvest, no compound button - the balance grows in place.

When you withdraw, you receive principal plus accrued yield in a single transfer. No separate yield tokens to redeem.

What moves a pool's APY day to day

DriverDirection
Higher trading volume on pairs that borrow this assetAPY ↑
Higher pool utilisation (more of the pool out on loan)APY ↑
New deposits with flat volumeAPY ↓ (TVL grows, fee throughput doesn't)
Withdrawals with flat volumeAPY ↑ (TVL shrinks, fee throughput stays the same)

Volatile days push the high end of every pool's range; quiet weekends pull it down.

When the APY changes

The number on the dashboard is a trailing rate based on the last 24 hours of activity on that specific pool. It's the best forward estimate, not a guarantee.

If you deposit at one rate and trading volume on the pairs that borrow that asset halves the following week, your realised APY for that week will be lower than what the dashboard showed at the moment of deposit. The mechanism is transparent; there's no hidden lockup or rate cliff, but the rate itself isn't promised.

A note on asset-price exposure

The pools for longer-tail assets (ARB, GMX, LINK, UNI) pay yield in the same asset. Your USD-denominated PnL is the yield rate plus the asset's price move while deposited. A 30% APY on UNI that drops 40% over the same period is a loss, not a gain.

USDC.e is the only pool where the asset itself stays roughly constant in USD. WBTC and WETH track BTC and ETH price respectively; the longer-tail asset pools carry the full asset-price exposure of those tokens.