# FAQs > Answers to the questions people ask most. Each links back to the page that explains it in full. Canonical: https://spout.finance/docs/faqs/ --- Answers to the questions people ask most. Each links back to the page that explains it in full. ## General ### What is Spout? A protocol on Solana where you borrow USDC against tokenized US stocks at 0% interest, and where lenders earn yield from covered call premium on that collateral. ### How can loans be 0% interest? Lenders are paid from option premium on the collateral and from Treasury bill yield, not from borrowers. Charging interest as well would charge twice for the same thing. ### Why use Spout instead of a margin loan or a perpetual future? Both charge for time: margin interest accrues every day and perpetual futures charge funding. Spout charges no interest, so holding longer does not cost more. You give up the move above the strike in a cycle where calls are exercised instead. See Why Borrowing Against Stocks Has Always Been Expensive. ### Is Spout good for day trading? Not especially. If you open and close a position within a day, financing costs little anywhere. Spout matters more the longer you hold, and collateral works in weekly options cycles, so it is built for positions you keep for weeks, months or years. ### Why do you compare Spout with prime brokerage? Because the terms Spout offers are the ones prime brokers and private banks give their largest clients: cash without selling, leverage without daily interest, income from the assets you hold, and yield on idle cash. Spout delivers them through shared onchain pools instead of individual accounts, so they do not depend on account size. See Introduction. ### Is this a teaser rate? No. Interest is 0% for the life of every loan. Your loan only changes when you borrow or repay. ### Which blockchain and stablecoin does Spout use? Solana and USDC. ### Can I use Spout from my country? Spout is not available in restricted jurisdictions, including the United States, its territories and Canada. See Where Spout Is Available. ### Do I need to verify my identity? Some features may require it. Lending does not. ### Does Spout hold my assets? Your wallet is yours. Lending deposits sit in accounts controlled by the Spout program. Collateral sits in the program's pool escrow, and once it has joined the pool the real shares behind it are held in Spout's brokerage account. See Your Assets and Custody. ## Borrowing ### How much can I borrow? Up to 50% of your collateral's value. ### What does borrowing cost me? No interest and no Spout fees. Your cost is the rise above the strike in any cycle where calls are exercised, and a penalty only if you are liquidated. ### When can I repay? At any time, in any amount, unless repayments are paused. ### When can I withdraw my collateral? When its current options cycle ends and its tokens are back from the issuer, usually the next business day, as long as what remains keeps your loan within 50% LTV. New deposits must go through one cycle first. ### What happens if my stock falls? Your LTV rises. If it passes your asset's threshold, between 54.1% and 62.5% depending on the asset, Spout sells enough collateral to bring it back to about 50%, and a penalty of 4.1% to 12.5% applies to what is sold. ### Will I be warned? The app shows your LTV, health factor and liquidation price at all times, coloured by safety zone. Check them regularly, especially before weekends. ### Can I lose more than my collateral? Spout has no mechanism to claim more than your collateral. A shortfall after liquidation is covered by the Insurance Fund and then lenders. ### Can I lose my collateral? Mainly two ways: a liquidation after a large fall, or an assignment, where you give up the rise above the strike in a rally. Rarer risks, such as an issuer, broker or smart contract failure, are covered in Risks for Borrowers. ### What is Auto buyback? The app's name for partial liquidation. On by default, it sells only enough to restore your position. Off, a liquidation sells everything. ### Can I buy with leverage? Yes, from 1x to 1.98x, in one transaction. See Buying With Leverage. ### Why can I not withdraw during a cycle? Calls are written against the shares behind the pool. If collateral could leave mid cycle, calls would be left uncovered. ### Do I get the option premium? No. Premium goes to lenders, the Insurance Fund and the treasury. You get a loan with no interest. ### Do I get dividends on my collateral? Yes. Dividends on the shares behind a pool are credited to the borrowers in that pool, in proportion to each position. Withholding tax may apply. ### What happens on weekends? You can borrow and repay 24/7. Liquidations are executed during US market hours, so a weekend fall is acted on at the next open. ## Lending ### What do lenders earn? Option premium after the protocol fee, plus Treasury bill yield on idle cash, split between Senior and Junior. ### What are the target yields? About 9% for Senior and 32% for Junior, from the model on the Tranche Math page. They are illustrations, not promises. ### What is the difference between Senior and Junior? Senior is paid first and absorbs losses last. Junior earns 75% of income above Senior's 7% priority and absorbs losses first. ### Is Senior's 7% guaranteed? No. It is a priority. In a weak period Senior takes all available income, and shortfalls do not carry over. ### How is yield paid? It accrues continuously and settles weekly. Your share tokens rise in value; there is nothing to claim. ### Can I lose money lending? Yes. Junior can lose part of its balance in a loss event, and Senior can too if a loss uses up all of Junior. ### What does it cost to withdraw? A 0.20% fee on the USDC you withdraw. An instant Senior withdrawal can also carry a haircut of 0% to 3%, depending on how full the reserve is; the queue has no haircut. ### How do I withdraw from Senior? Instantly from the reserve, with a 0% to 3% haircut, or through the queue with no haircut. ### How do I withdraw from Junior? Give 45 days notice, then join the queue. ### Is there a lockup? Not for Senior. Junior has a 45 day notice period. ### Do lenders need collateral or identity verification? No. ## Tokens and assets ### Which assets are supported? AAPL, NVDA, GOOG, SMCI, IBIT, MSTR, BSOL, PFE, GS, XOM and GLD, as tokens from approved issuers. ### Can I deposit tokenized stocks I already hold? Yes, if the token is a supported asset from an approved issuer. The app shows which tokens are accepted. ### What happens to dividends? For tokens in your wallet, they follow the token issuer's terms. For collateral that has joined a pool, dividends are credited to your position in proportion to its size. ### Does Spout issue its own tokens? Spout does not issue tokenized stocks; it works with tokens from approved third party issuers. The only tokens Spout issues are the share tokens lenders receive for Senior or Junior deposits, and receipt tokens that stay inside the vault to track collateral held as shares. ## Strategy and safety ### How does Spout decide which calls to write? By per asset rules that set strikes out of the money so assignment is uncommon. The exact rules are not published, so others cannot easily predict the pool's trades and trade against them. ### Where are the calls traded? On US options exchanges, as standard listed options, through Spout's brokerage account. They are written only against real shares that back the pool. ### What protects lenders? Over collateralized loans, partial liquidations, the Insurance Fund, the Junior tranche in front of Senior, the cash reserve, and automatic pauses. ### Has Spout been audited? Audit reports are listed on the Security Practices and Audits page when published. ### What are points? Rewards for collateral and lending, earned from real protocol fees and redeemable as credit to your lending balance. See Points.