Lending Protocols are a huge innovation in the blockchain space. The majority of these protocols are built on top of Ethereum. Lending protocols are a blanket term for some type of decentralized debt marketplace. They are called protocols because they exist at a level where anyone can plug and play with this decentralized piece of software that lives on a blockchain.

For those of you without knowledge of the Ethereum blockchain this is what we mean. This is the Compound.Finance smart contract. It lives on Ethereum. This smart contract is what runs compound.finances business. Smart contracts all tokens and assets on Ethereum to move in programmatic ways.

You will understand the basis of lending protocols, how to use them and the technology that enables Outlet to work within this article.

The easiest way to get started earning interest on stable coins using a lending protocol  would be to use the Outlet mobile app. You don't need anything else to get started that way.

Lending Protocols are a genre of decentralized apps, business, or DAO (Decentralized Autonomous Organization). All of these phrases would be correct to say. They are a business built around the concept of building a decentralized debt marketplace.

A lending protocol will have one of the following:


: The people who back loans within the debt marketplace in some capacity.


: These are the people who take on the debt and enable suppliers to earn a return on their funds.


: A blockchain will show you where, how, and when loans and money is introduced to these protocols. Most protocols will have some type of a smart contract. These smart contracts will enable people to see what is going on with a particular lending protocol or their account(wallet)  itself.

There is not necessarily a right answer on how to use a lending protocol. There is however a much better and clear way than most people use. Outlet provides people with a one step and easy way to pull together everything you would need to actually use a lending protocol.


The most popular way to start earning interest on your stable coins would be as follows.

Obtain your dai or stable coin asset you would like to use to gain interest on, or take a loan out on. If you are a newcomer to crypto I would suggest you just download Outlet and get your dai that way or you find a way to obtain it via other means. This can be done through almost any exchange. Dai in particular is the preferred method to interact with these protocols.

Send dai to a web 3.0 wallet The industry norm is to use 

 at this point. Metamask is the most popular Ethereum wallet and is safe and secure. It does require you to store keys which can be a pain for some people, but an essential feature to others. It is important that if you are using metamask to interact with lending protocols to save your key and safely store it. The best way would be to write them down and keep them in a safe physical location.

Once you have your dai in a web 3 connected wallet you should be able to interact with these new decentralized applications. This is the most tricky step, as each lending protocol will have a different UI and will be slightly different to interact with and begin using. Most of them are very simple and you should be able to figure it out.

Authorize their application within your wallet. You will be asked by metamask if this application is warranted to have access to your wallet. This is what allows you to actually interact with a lending protocol. At this point the protocol can see how much is in your wallet that are eligible to be supplied or borrowed. Once you select your amount by selecting supply or borrow the lending protocol will carry out that function as you selected.

How to get the best returns on Lending Protocols?

Getting the best return when you are lending to a protocol is a very hard thing to do manually. If you wanted to do this right now you would have to do a lot of manual trading and watch your supplied assets religiously. It is not practical to manage the returns you earn using lending protocols.

The easiest way to maximize your return using lending protocols would be Outlet. Outlet has a planned feature of maximizing the returns for users and supplying dai to the highest yielding lending protocol.

Lending protocols are super safe loans to back because they are overcollateralized. Meaning that the borrower will put up more assets than they are borrowing. Although the loans themselves are safe from a financial standpoint. There are other outstanding risks involved in using a lending protocol.


Using a lending protocol carries another layer of risk. This risk is called smart contract risk. The risk is that it is possible to hack a smart contract and have a hostile takeover. There have been several smart contract hacks that have taken place to companies outside of the DeFi space and is a possibility to happen to these protocols as well.


There is a small risk called smart contract risk. If the developer of the smart contract creates a smart contract with security flaws there is a chance that contract itself can be hacked.


DeFi protocols have fortunes locked in them at this point and are trusted by thousands of people. The larger lending protocols have some of the best smart contract security on the market and thus far no one has come close to hacking one of these protocols.

Lending protocols are made up of a two sided product. One side of the product supplies the money to fulfil loans and the other side takes out these loans.There are a few reasons why people are taking out so many loans against their cryptocurrency. There are a few problems with using cryptocurrency in everyday life that don't make it as viable as your countries traditional fiat currency.


The following are some of the reasons why people take out loans against their cryptocurrency:


: This is when someone who holds assets is looking to essentially double dip and buy more crypto with the crypto they own as well.

To have a right to buy it back at a certain rate

: people will often take out a loan against their crypto holdings if they are looking to extract cash from their portfolio. The loans themselves provide users with a way to buy it back at a specific price and is a common route for people with large portfolios to do.

: Margin trading is a method of trading assets using funds provided by a third party the third party can be one of these lending protocols.

If you have any further questions a great place to go would be our Discord server. We will be happy to answer anything.

Everything You Need To Know About Lending Protocols - The Complete Guide

Banks are a great product. They offer people a way to safely store their assets under the banks management. Governments ensure that these banks are kept up to high standards and and there to police banks from misusing your funds.

Banks use your money to make themselves money. The dollars that you put into these banks are being put to work by the bank itself. When the bank puts your money to work you don’t know where it's going or the kinds of returns the bank is actually making on your dollars. 

Banks do not tell you where your dollars go and what your dollars go toward. When you deposit your dollars into Outlet you are able to see exactly what is going on with your dollars thanks to the Ethereum blockchain. You are able to see where your funds have been by using something like Etherscan. The etherscan information will be accessible through the Outlet app.

Depositing your money in your Outlet buys a stable coin. A stable coin is a cryptocurrency that is pegged 1:1 to 1 USD. These ERC20 tokens are on the Ethereum blockchain. These dollars are just as good as your cash.

At outlet we want to be as transparent as possible. When you deposit your dollars into Outlet we want you to treat it as a bank account. You deserve to know what's going on with your funds and how your funds generate interest.

Outlet is supporting the DeFi movement. Decentralized finance is something we would love to talk about in our discord, but won't go too into detail in this blog post.

Outlet uses protocols that exist on the Ethereum blockchain to match your funds with liquidity providers that are able to get a return on your dollars. Outlet will match your funds with the highest interest rate protocol.

The Difference Between Outlet And A Bank Account.

A DeFi or decentralized finance community exists at Outlet. The people interested in decentralized finance tend to be like minded. Topics and discussion within our decentralized finance and Ethereum community are as follows. This DeFi discord exists as a way for people to get news from other DeFi developers about exciting new Ethereum applications and things to do with your ethereum.

This discord community is a great place to openly speak about cryptocurrency products of any kind, but referral links will not be tolerated. Speaking to one another about exciting things within the decentralized finance niche is perfectly fine. This decentralized finance discord server supports the forward thinking approach of the community and the products they create.

This decentralized finance community is also for anyone interested in gaining some type of a return on their money. This decentralized finance community is made up of a large amount of people who want to be the bank. The common goal of decentralized finance is connecting funds and backing decentralized loans.

DeFi: The decentralized finance movement built on Ethereum.

Ethereum: decentralized platform for money and new kinds of applications.

Cryptocurrency: A transferable digital asset, often used as a store of value.

Smart contract: a pragmatic way to move money. Can uphold an agreement.

Blockchain: A decentralized public ledger.

Dapps: Decentralized apps built with some blockchain layered solution.

DeFi Community

Outlet is a cryptocurrency finance company that specializes in connecting USD to blockchain assets. Outlet's main product is its high interest rate money holding accounts. They work very similar to a bank account, in the sense that you store your dollars inside of it.

We are able to give you such a high rate of return on your deposited dollars because of how we manage your funds. When you deposit money in your outlet account there are a few things happening in the background that allow us to achieve this high rate of return. Mainly, we convert your assets to stable coins on the Ethereum blockchain and loan them out. Our process fulfills collateralized loans. Meaning people have an asset they are borrowing against that is worth more than the loan itself.

Depositing money in your Outlet account buys a stable coin. A stable coin is a cryptocurrency that is pegged 1:1 to 1 USD. So 100 stable coins = $100 USD. They are called "stable coins" because their value does not fluctuate and remains at $1 USD, unlike Bitcoin. These stable coins are on the Ethereum blockchain. These dollars are just as good as your cash.

In order to achieve 10% interest we need to utilize blockchain technology. The technology allows us to integrate our mobile application to open source protocols that are algorithmic, efficient money markets on the Ethereum blockchain.

Outlet is similar to a liquidity fund. We seek out the best return for those who save with us.

What is Outlet, and how does it work?

A practical blockchain product for non crypto people

Cryptocurrency and blockchain related products have yet to have an app with true product market fit for the average consumer. Building a product in the blockchain niche and finding a terrific fit has proven to be very difficult from an entrepreneur's perspective.

Finding Product market Fit in the Blockchain Niche

Product market fit in the blockchain industry has proven itself to be very difficult for some ventures. There are several reasons why I would argue that a blockchain technology company is one of the hardest companies to find product market fit.

Due to the short history of the blockchain industry there is not much to go off of in terms of end consumer products. The closest product to have product market fit was Cryptokitties. Cryptokitties was a fad, but had product market fit for the time of the fad.

Out of all the promising cryptocurrency apps few would have thought Cryptokitties would be one of the most promising. It’s that unknown that makes launching a crypto related company.

The biggest tip I have for anyone launching their cryptocurrency or blockchain related company would be to look at a large existing markets and find a way to improve on them. If the market is large enough and the innovation you bring to that field is innovative people will use your application. Marketing to any niche with a new and innovative product seem to work best by speaking to potential users in person. Try and go to a few meetups, and get people excited about what you are creating. Be where the conversation in your niche is happening, and don't be afraid to talk about the current problems they are facing if your app solves them.

Outlet - A better savings account powered by blockchain technology.

Outlet is a new project that started at the Y Combinator Hackathon. When we originally built Outlet it was a much different product. The product was a decentralized collateralized bitcoin loan platform. We saw certain projects popping up in the Ethereum and DeFi space that users loved and felt really inspired by them.

The issue with the original idea behind outlet became funding the loans. Without funding the loans our blockchain product would never be able to find product market fit.

Instead we saw the potential for allowing anyone to back existing loans, and connecting their funds with an existing pool of loans.

People invest in cryptocurrency to possibly make money. These people are searching for that. Financial products are a great solution to create that possibility. Making your customers money and providing them with a yield is a great way to find a fit within the blockchain niche because it is what brings everyone to the industry itself. Part of building a blockchain product is finding what angle you are going after your users with. There needs to be some type of competitive edge to your product compared to others. Creating a new category product seems to be the right way to go about things.

Building a blockchain company that has product market fit is hard because the field is constantly changing and we are still in the beginning stages of something huge. The companies that exist in this era of the blockchain world have a massive first movers advantage to market.

Outlet is a high interest way to manage and save your USD, similar to a bank account. Our customers receive up to 10% interest on their USD. Outlet matches your funds with people that issue cryptocurrency backed loans. You can use Outlet just like a bank account, but we are not a normal bank. This blog post gives you more information behind what we are supporting, and where the funds you deposit go in order to achieve the amount of interest they generate.

What is DeFi, And How Does DeFi relate To Outlet.

Defi, or Decentralized Finance describes a financial system that is built on top of blockchain technology, such as Bitcoin or Ethereum. These decentralized financial products are typically transparent, and are not owned by a sole entity and are accessible to anyone. Ethereum has proven itself to be an incredible technology, and will likely become one of the most transformative movements in finance.

Your Funds Are Loaned To The Following Protocols

These protocols and companies issue loans. These loans secured loans backed by cryptocurrency. When we lend your money, the person borrowing has to secure the loan by depositing collateral. Currently, if a borrower wants to borrow $100 they would need to deposit $200 in collateral. This assures that your money is safe if the borrwer were to default on the loan.

Lending out your cryptocurrency to protocols and organizations that issue loans backed by cryptocurrency is the type of cryptocurrency lending we are speaking of when you see it on our site.

When you lend out your cryptocurrency you are typically lending it to a smart contract on the Ethereum blockchain. This smart contract provides the decentralized mechanisms that allow anyone to lend cryptocurrency to anyone who is looking to get a loan.

Outlet loans stable coins to companies and individuals that are looking for funds to back cryptocurrency loans. In return for providing the capital to fulfil the loan we give the interest rate back to our users.

Cryptocurrency loans are safe. Cryptocurrency loans are required to be over collateralized due to how volatile the asset is. The loans themselves are collateralized at a high rate of around 150-200% meaning that people would have to put up $2 in cryptocurrency for every $1 lended to them. This is much safer in comparison to banks that give mortgages to just about anyone.

Reasons To Take Out A Loan Against Your Bitcoin

People want to take out a loan on their cryptocurrency for multiple reasons. These are a few good reasons why someone would want to take out a loan on their cryptocurrency.

Outlet has the lowest interest rate in comparison to other similar bitcoin loan platforms. Outlet allows you to get cash for locking up your cryptourrency. You can use this cash to buy more crypto to continue trading.

When you typically buy Bitcoin you dont anticipate having to turn it back into cash. It can be a mess between taxes, exchanges, and fees. Taking out a loan gives you the right of owernship over your crypto, but also gives you the USD to pay for anything you would like.

Outlets interest rate is often times much lower than other fiat rates. You can take advantage of the cryptocurrency you own by using it to refinance other debt.

Our product is constantly in a phase of devleopment. If you have ideas or suggestions for the product itself please join our

How We Generate Interest - Understanding what goes on behind the scenes at Outlet.

DeFi is the one of the most important things in the Ethereum ecosystem. DeFi is finding real product market fit throughout the entire cryptocurrency ecosystem. This movement is not only a bullish indicator of future gains, but a positive influence on the world. Open finance is changing the way people look at blockchain technology.

The open finance movement DeFi is an idealistic future where anyone can back any loan and reap the benefits of doing so. The interest that was formerly only available to banks can be earned by anyone willing to put up the funds.

Outlet - Connecting Your Dollars To DeFi And Crypto Loans

Outlet is a mobile app launching soon that will connect traditional dollars to the DeFi ecosystem. The mobile application is will look, and feel like a traditional bank account on the front end but be a cryptocurrency application on the backend.

The Average interest rate on Outlet is around 15% currently, compared to traditional savings accounts that pay less than the rate of inflation.

The app will keep track of the interest rate you earn on your dollars that go toward funding lending protocols such as Compound.finance, Dharma, or Maker, these lending protocols have loans waiting to be matched with your funds. Once your funds are matched with a loan and are transmitting the funds non-custodially to the top yielding protocol. We maximize the return between all yields of stablecoins on the Ethereum blockchain.

All transactions are tracked by Etherscan. Etherscan shows users that your funds are in fact tied to a collateralized debt position (CDP) A CDP is some type of loan backed by a digital asset. The reason why these loans are safe to back is that they are over collateralized. Meaning users are locking up over 150% of the funds to back a loan.

For example, people that are taking out a loan on their Bitcoin, Ethereum or other large market cap cryptocurrency have to pay well over the dollar amount they are taking out. The collateralized ratio works like this.

If the person wants to take out $1 they would have to lock $2 in Ethereum or Bitcoin. Your dollars will be shown funding the CDP through Etherscan.

Fueling the fire of DeFi has its benefits. Benefits that are on average a 7% return on your dollar. Stable coins and decentralized finance is going to change the way the lending works. Blockchain technology is finding product market fit with decentralized finance and the concept of open finance.

Fueling DeFi

A way for non crypto people to use a crypto product

There are plenty of crypto products for crypto people. There are a large number of people and USD value using products that allow you to stake or earn interest on your existing crypto. However, these products are only for crypto people.

The interest you would earn using one of these products would be impossible for traditional banks to match, meanwhile lending protocols are doing this in a decentralized way and all you need to do is lend them your cryptocurrency.

The hard truth is that most people do not have crypto and are known as non-coiners. These non-coiners have a common interest in America. They use the United States Dollar, and everyone could use more.

Stable coins are essentially United States Dollars on a blockchain. In the current landscape of cryptocurrency most people use these stable coins to maintain a stable amount in their accounts in the volatile world cryptocurrency.

Stable coin interest rates vs USD interest rates

Stable coins such as Dai and USDC have interest rates far beyond what people receive on their United States Dollars. The average bank account interest rate is 0.09% meanwhile the current average rate of these DeFi protocols is around 14%

Allowing non-coiners to earn these high interest rates

Non-coiners are people without crypto, and most likely do not care enough about cryptocurrency to become a cryptocurrency owner. However, the underlying technology of these lending protocols are useful to anyone looking to get a return on their USD.


Outlet - A practical cryptocurrency app for non crypto people

Outlet is a better bank account built on top of Ethereum. The interest rate we give customers is derived from lending protocols such as 

Users of the mobile app itself will not necessarily know that on the backend the application is a DeFi product unless they look further into the product itself. The app will look, feel, and act like a traditional bank account.

When someone first starts their Outlet account they will be requested to give identity verifying documents like a traditional bank account and be asked to hook up an existing bank account to transfer funds. When someone uploads their funds to Outlet those funds will get turned into Dai and will be supplied to a lending protocols smart contract.

The Positives To Taking Out A Loan Against Your Cryptocurrency

There are many reasons why someone would take out a loan on their cryptocurrency. Everyone has their own reason to want to want a Bitcoin to Fiat Loan. This is a list of the most popular reasons people may take out a loan on Outlet.

Our product is constantly in a phase of devleopment. If you have ideas or suggestions for the product itself please join our discord

The Advanges To Taking Out A Loan On My Bitcoin Using Outlet.

The advtantage to taking out a Bitcoin loan with Outlet is the low collateralized rate, and that we specialize in USD loans. Our easy to use platform makes taking out a Bitcoin backed loan in minutes.

When Is A Good Time To Take Out A Loan Against My Bitcoin?

There is always a good reason to take out a Bitcoin loan. Right now is a great time to take out a Bitcoin loan in general. As we are headed into a more bullish market we find that getting the liquidity for loans is no longer an issuse. There is never a wrong time to take out a loan. Getting dollars backed by your own cryptocurrency is simplest using Outlet.

Why You Should Take Out A Loan Backed By Your Bitcoin or Cryptocurrency

The future of DeFi products are going to be middleware that connects protocols to a user facing application. We strongly believe that our product, Outlet is going to take a large role in molding the DeFi landscape and bring these returns to people outside of the realm of cryptocurrency.

It's hard to imagine the killer consumer facing app of DeFi or Ethereum itself. One might argue that the killer app itself is Dai or Compound. However, these products are a bottleneck for traditional people and noncoiners alike. These applications require knowledge and connecting several products together. We have a vision of what the killer Ethereum application will be at this point in time and would like to share.

The killer DeFi application will use other products as building blocks and allow anyone to benefit from the technology being developed on the Ethereum Blockchain.

Traditional finance and banking products have several issues from a consumer point of view. A traditional bank account pays out 0.09% interest on average. That is not even 1/10th of 1%. If the rate of inflation is around 2% each year you are technically losing money while paying these banks fees to store your money. Banks will use your funds to issue loans and make a profit while using your dollars.

We believe the killer DeFi application is going to be Outlet. Outlet is essentially a mobile application that is a bank account built on top of Ethereum. On the backend we are a DeFi application and on the front end we look feel and act like a traditional bank account. We use lending protocols as a tool to achieve a high interest rate for our customers USD.

When you download the Outlet app from the app store you will see that the Ethereum features are almost hidden. The goal of Outlet is to bring DeFi to everyone. In the mobile app you can transfer funds from your bank account to our smart contract. Our app allows anyone to hook up any bank account in the United states and directly turn your dollars into dai. These Dai are then supplied to a lending protocol such as 

Stable coins are theoretically equivalent to the United States Dollar, and the DeFi protocols allow stable coins to achieve an incredible interest rate compared to traditional bank accounts.

To sum up the goals and feature set of Outlet at launch we will have a way for you to onboard your traditional bank account to become a DeFi bank account natively within our application. From there you are able to withdraw and transfer funds back to your traditional bank account.

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