Deposits, Withdrawals, and Yield Accrual

Deposits and Withdrawals

Elemental Lend supports instant deposits and withdrawals, giving depositors uninterrupted access to their capital. When you deposit, funds are immediately routed to the highest-yielding opportunity available across our integrated pools. Yield generation begins the moment your liquidity is deployed.

Withdrawals follow the same principle: they settle instantly as long as sufficient unutilized liquidity is available. This design gives users the flexibility of a money-market protocol with the yield optimization of an actively managed lending router.

Yield Accrual and Balance Updates

Yield accrues continuously from the underlying lending venues, but your on-chain balance updates only when a triggering event occurs. These “crank events” include:

• A new deposit

• A withdrawal

• Reallocation of capital between integrated pools

• A claim of accrued yield

Each event prompts a refresh of user balances and distributes accumulated yield proportionally. This approach ensures accurate accounting while reducing gas expenditure thereby improving capital efficiency.

The result is a system where your yield is always accruing, even if visible updates appear intermittently.

Utilization Rate and Liquidity Availability

As with any lending protocol, withdrawals depend on the utilization rate of the pool. You can withdraw up to the portion of liquidity not currently lent out. When utilization is high, available liquidity may temporarily be insufficient to satisfy large withdrawals.

In these moments:

• Higher utilization leads to higher yields, incentivizing liquidity providers to remain in the pool or add new capital.

• Borrowing becomes more expensive, discouraging additional borrowing and encouraging existing borrowers to repay.

These opposing incentives create a natural stabilizing effect, helping the pool cycle back towards healthier liquidity levels.

However, it is important to recognize that extreme conditions, such as market stress or simultaneous large withdrawal attempts, may still result in temporary illiquidity. In such cases, withdrawals will succeed once borrowers repay or new liquidity enters the pool.

This behavior is typical of all lending markets, and is an inherent characteristic of pooled credit systems.