How PembRock Finance Works
The lender deposits their NEAR and earns interest from the borrowing fees paid by yield farmers.
The yield farmer opens a leveraged yield farming position on a trading pair, borrowing NEAR from the vault and joining the farming pool with leverage. The yield farmer gets higher returns due to the larger stake, but pays a 10% premium for the privilege of using borrowed funds.
The staker locks their PEM and earns portion of all profits generated by the protocol (the bigger the amount and the longer the period, the larger the reward). The staker also gets to vote on the size of rewards to be distributed among lenders and farmers every month.
The liquidator bot monitors all yield farming positions, liquidating those that become too risky. If a leveraged yield farming position does get liquidated, 5% of the position’s fee goes to the protocol, and is then distributed among those who have staked the PEM token.