Where Does the Yield Come From?

When you start learning about crypto, DeFi, and stablecoins, it's natural to wonder: how is this possible, where does the yield come from, and is it safe?

Lulo generates yield by depositing funds into over-collateralized lending pools. These pools are enforced by blockchain smart-contracts that have strict rules around borrowing and repayment.

Lulo has integrated 4 of Solana’s biggest and most trusted lending platforms to generate yield: Kamino, Drift, MarginFi, and Save.

What is an Over-Collateralized Lending Pool?

Imagine asking a friend to borrow $500. To show you're serious, you offer your iPhone—worth $1,000—as collateral. If you repay the loan, you get your phone back. If not, they keep it.

That's over-collateralization: offering more than you borrow as security.

In DeFi, platforms use smart contracts to enforce this same principle:

• Borrowers must deposit more value than they borrow.

• If the collateral's value drops too low, it's automatically liquidated to cover the loan.

• This system helps protect lenders—like you—from defaults or market crashes.

Everything is transparent, auditable, and managed by code.

Why These Pools?

Lulo only usese pools that:

• Require over-collateralization

• Maintain dynamic collateral ratios

• Employ real-time risk monitoring

• Are audited, liquid, and battle-tested

Simply put: these are the most conservative yield engines in crypto.

Lulo continuously monitors these pools' health, including their collateralization ratios and utilization levels. We avoid overcrowded pools to ensure you can withdraw whenever needed.

Why Stablecoins?

Most borrowers in these pools use stablecoins—digital dollars like $USDC.

Why? Because they're stable, predictable, and easily transferable across the crypto ecosystem. This means your yield comes from real demand for liquidity, backed by collateralized assets behind the scenes.

How You Can Get Diversified with Lulo Today

Lulo is the only consumer platform in DeFi to offer a way to earn sustainably on your digital dollars (stablecoins) with automated diversification, securely higher yields, and built-in capital protections. Lulo offers two core deposit options, letting you choose the balance of safety and reward that works best for you:

• Boosted Deposits provide the highest risk-adjusted lending rates for $USDC on Solana, on average offering 1-2% more APY than the nearest competing pool.

  • You can think of this deposit type like a “stock”

• Protected Deposits are the exclusive option for built-in capital protection on your $USDC in DeFi. With Protected Deposits you’re covered against black swan events like hacks.

  • You can think of this deposit type like a “bond”

• Classic Deposits, our original product and third deposit type, provides complete control over which pools your funds are routed through, the ability to use a variety of stablecoins, and more optionality for those with advanced trading strategies.

All yield generated through Lulo earn yield that auto-compounds every second, viewable in your Lulo dashboard the moment after you make your first deposit.

All it takes to start using Lulo is 1 $USDC + 0.005 $SOL (~$0.90) to initiate your account - we have no account minimums to maintain nor fees we charge to manage your money.

This is how Lulo helps people Save different—by using modern tools with old-school principles: trust, transparency, and risk awareness.

Get started today, after all, Lulo is The Modern Way to Grow Your Wealth.