What is Supplying?
Supplying means depositing your crypto into Moonwell, where it becomes available for other users to borrow. In return, you earn interest for as long as your assets stay in the protocol.
The model is straightforward: borrowers pay interest to access liquidity, and that interest flows to the people who supplied the assets they borrow. The more an asset is borrowed, the more its suppliers tend to earn. (For how that rate is set, see Understanding Supply APY and Protocol Parameters.)
Supplying is non-custodial. Your assets stay in audited smart contracts, not with a company, and you can withdraw them at any time, subject to available liquidity.
Why Supply?
People supply assets for a few reasons:
Earn passive yield on crypto you're already holding, instead of letting it sit idle.
Unlock borrowing power. Supplied assets can be enabled as collateral, letting you borrow against what you hold without selling it.
Stay flexible. There's no lockup period, so you keep access to your funds.
What are mTokens?
When you supply an asset, you receive mTokens in return. These are ERC-20 tokens that represent your share of the lending pool.
For example, supply USDC and you receive mUSDC; supply ETH and you receive mETH. Your mTokens accrue interest automatically over time, so your position grows without any action from you.
Because mTokens are standard ERC-20 tokens, they sit in your own wallet and stay under your control. When you withdraw, your mTokens are burned and you receive your original asset back, plus all the interest you earned.
How to Supply Assets
Go to the Lend page in the Moonwell app.
Select the asset you want to supply from the available list.
Enter the amount you want to supply. You can supply any amount, though for very small deposits it's worth weighing the amount against gas costs.
Click Approve to allow Moonwell to spend your tokens, and confirm the transaction in your wallet. This is a one-time permission step per asset.
Once approved, click Supply to complete the transaction, and confirm it in your wallet.
Your supplied assets are now earning interest. You'll see your position, the current APY, and your accrued interest on the Lend page.
Tip: If it's your first time, try a small amount to get familiar with the flow before committing more.
Enable Assets as Collateral
Supplying and borrowing are separate actions. Supplying alone simply earns interest. If you also want to borrow, you can enable your supplied assets as collateral. This step is optional.
When collateral is enabled, you can borrow other assets against your supplied position. How much you can borrow depends on each asset's collateral factor, which is the percentage of its value that counts toward your borrowing power.
For example, if USDC has an 80% collateral factor and you supply $1,000 USDC, you can borrow up to $800 worth of other assets. Stablecoins typically have higher collateral factors than volatile assets, because their prices are more predictable.
To enable collateral:
Go to the Lend page and find your supplied asset.
Toggle the Collateral switch on.
Confirm the action in your wallet.
You can disable collateral at any time, as long as you don't have active borrows that rely on it. If disabling would leave a loan undercollateralized, the action fails until you repay or add collateral.
Is My Supply at Risk?
If you only supply and never borrow, your supplied assets are not subject to liquidation. Liquidation risk applies only once you borrow against your collateral and your position falls below the required threshold. (See Credit Limits and Liquidations.)
As with any onchain protocol, smart contract risk exists. Moonwell works to reduce it through measures such as audits before deployment, an asset listing framework, and Chainlink price oracles. The Safety Module provides an additional backstop. (See the Safety Module Overview.)
Key Points
You earn base interest automatically; no claiming needed.
mTokens represent your position and stay in your wallet.
There's no lockup period. You can withdraw anytime, subject to available liquidity.
Enabling collateral is optional and only needed if you want to borrow.
Supplied assets are safe from liquidation unless you borrow against them.
Frequently Asked Questions
Do I need to claim my interest?
No. Base interest accrues automatically through your mToken position. Token rewards, if any, are separate and claimed manually. (See Claiming Rewards.)
Can I supply more than one asset?
Yes. You can supply multiple assets at once, each with its own rate and collateral factor, and manage them independently on the Lend page.
Can I withdraw anytime?
Yes, subject to available liquidity in the market and, if you've borrowed, your collateral requirements. (See How to Withdraw Supplied Assets.)
What's the difference between interest and rewards?
Interest is paid by borrowers and compounds automatically. Rewards are incentive tokens that accrue separately and must be claimed. (See Claiming Rewards and Understanding Supply APY.)