Borrowers
Borrowers use Diffuse Prime to gain leveraged exposure to curated yield strategies. The platform abstracts away the complexity, sourcing liquidity, swapping assets, and executing transactions, so users interact with a convenient UX with streamlined flow.
Entering a yield strategy
Strategy selection
Borrowers are free to select any available strategy suitable for their risk/return profiles. Similar strategies are packed in vaults, sharing liquidity for leverage between strategies.
Collateral deposit
Borrowers deposit approved assets into the vault as collateral, which determines their borrowing power.
Higher collateral increases borrowing power, enabling larger positions.
Accepted collateral types include:
Vault’s main asset (e.g., ETH, USDC, BTC)
Yield strategy asset (e.g., PT-eUSDe-14-aug-2025)
Intermediate assets (e.g., USDe, eUSDe) - planned for future versions.
Leverage selection
Borrowers choose a leverage level or multiplier for their position based on collateral value. For example, at 3× leverage on a $100 deposit, a vault will borrow $200 more, deploying $300 total.
Higher leverage means higher potential yield, but also higher risks.
Limits for the leverage level are defined by the platform's Risk engine (TODO: link to risk engine docs here). The platform will show you safe leverage ranges and won't allow selections that exceed the maximum LTV allowed.
Creating a strategy position
After leverage is set, the vault deploys the combined funds (collateral + borrowed) into the selected yield strategy - those could be Pendle PT on Ethereum, Pendle LP on Arbitrum, Spectra PT, DeFi liquidity pools, partner protocol lending, or other approved strategies.
Funds are moved automatically, no manual steps are needed from the borrower.
Strategies are curated by Diffuse Prime in early versions, it's a limited set of pre-defined strategies to ensure safety and decent returns.
Borrowers can track their position value, accrued yield that is generated continuously, and the position's health factor in real time.
Withdrawal and claim
Early withdrawal
Borrowers can close positions and withdraw their funds before the strategy maturity date.
This requires repaying borrowed funds, so early withdrawal fees apply - see Protocol Fees.
Though this is not the preferred outcome, as it reduces capital efficiency, it provides flexibility for managing collateral and risk.
Claiming rewards and collateral
Once the strategy reaches maturity, borrowers can claim both:
Their initial collateral, and
The net rewards generated during the strategy lifecycle.
Recovered funds can then be redeployed into new strategies.
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