How Lending Works

You deposit stablecoins. Your deposit does two things at once.

• Layer 1: Base yield. While idle, it earns a base yield from a vetted onchain money market. This is the "always on" component, comparable to where you would have parked the stablecoins anyway — except inside a structure that adds a second yield layer on top.
• Layer 2: Options premium. When borrowed, it sits inside an active loan against locked collateral, and a share of the options premium income from that collateral flows back to you. This is the productive layer that lifts the blended return above what any plain money market can offer.

Both layers compound. There is no rotation between them and no decision for you to make; the protocol handles routing automatically based on real-time utilization.

Spout's yield is fundamentally different from most DeFi. Rather than paying lenders with inflationary token rewards, the yield is sourced from real economic activity in options markets — specifically, the spread between implied and realized volatility.