Lending Vaults

Lending Vaults have gained popularity with protocols such as Morpho and Euler as they mostly offer higher yields than direct lending. Curators managing those vaults by deploying the liquidity provided by users to lending pools offering the best yields and adjust when yields declining, so users don't have to monitor and reallocate manually by themselves.

Curators also use leveraged looping, depositing LP tokens from one position to borrow against cheaper and deploy the borrowed assets again into lending pools with higher APY to increase yield performance of the vault while actively managing the risks.

Supplying to a lending vault works the same way as supplying to a direct lending pool.