💸 How Yield is Generated

Wellspring helps you earn higher returns by putting your funds to work in secure, transparent lending markets across decentralized finance (DeFi) markets.

Here’s how it works:

🌐 **Decentralized Finance (DeFi) Lending Markets

• When you deposit funds, they’re converted into stablecoins (digital dollars that stay pegged to the U.S. Dollar).
• These stablecoins are placed into smart contract controlled lending vaults on trusted decentralized platforms.
• One of the main protocols we tap into is HyperLiquid, a very active on-chain exchange and lending market.
• Borrowers on these platforms take loans by locking up more collateral than they borrow (called over-collateralization).
• Borrowers often use these loans to trade, provide liquidity, or manage their positions.

💰 How You Earn

• Borrowers pay interest on the funds they borrow.
• That interest is collected automatically by the smart contracts.
• Your share of the interest gets passed on to you as yield, growing your balance over time.

🛡️ Why This Matters

• Lending markets like HyperLiquid are active and liquid, which means there is steady demand from borrowers to support daily trading and other on-chain activities.
• Because loans are overcollateralized, there is a built-in layer of protection to help reduce default risk and fraud.
• You don’t have to actively manage or trade—everything happens automatically in the background.