Frequently Asked Questions

Layerbank is a decentralized, non-custodial money market protocol — the Universal Money Market for All Networks. It allows users to supply crypto assets to earn interest, or borrow against their collateral across multiple blockchain networks simultaneously. The protocol operates via smart contracts and uses an algorithmic interest rate model to dynamically adjust rates based on supply and demand.

Layerbank currently supports a broad and growing set of networks including Linea, Rootstock (BTC-native DeFi), Movement (Aptos-based), Manta, Scroll, Taiko, Plume, Hemi, Nibiru, and Mint. This multi-chain approach makes Layerbank the most universal money market available, enabling users on virtually any major network to access lending and borrowing services.

To use Layerbank, visit the app at the official domain and click the wallet connection button in the top right corner of the interface. Layerbank supports both EVM-compatible wallets (such as MetaMask, Rainbow, or WalletConnect-supported wallets) and MOVE-based wallets for Movement network. Once connected, you can select your desired network and begin interacting with the protocol immediately.

Supplying assets on Layerbank is straightforward. After connecting your wallet, navigate to the Bank tab on the main interface. Find the asset you want to supply, click on it to expand the market row, and enter the amount you wish to deposit. Confirm the transaction in your wallet. Once the transaction is confirmed, you will immediately begin earning supply interest, which accrues continuously and is reflected in your position balance.

Supply APR (Annual Percentage Rate) is the interest rate that suppliers earn for depositing their assets into the Layerbank liquidity pool. Borrow APR is the rate that borrowers pay for taking out loans. Both rates are determined algorithmically and fluctuate based on the utilization rate of each market. On Layerbank, you may also see negative APR values displayed for borrowers when reward incentives offset or exceed the base borrowing cost, effectively making borrowing subsidized.

To borrow on Layerbank, you must first supply collateral. After supplying, navigate to the Manage tab or expand a market row in the Bank tab and select the borrow option. The amount you can borrow is determined by your collateral value multiplied by the loan-to-value (LTV) ratio of the collateral asset. Keep your health factor above 1 at all times to avoid liquidation risk.

Layerbank supports a diverse range of collateral assets across its supported networks. These include native tokens like RBTC and ETH, stablecoins such as USD₮0, USDC.e, and USDT.e, as well as yield-bearing assets like STONE and mHyperBTC. The protocol categorizes assets into Core markets and Isolated markets, each with different risk parameters. Always check the specific collateral factor for each asset before borrowing.

Liquidation on Layerbank occurs when your health factor drops below 1.0, meaning your borrow position is undercollateralized. A third-party liquidator can then repay up to 50% of your debt and receive your collateral at a discount (liquidation bonus). To avoid liquidation, monitor your health factor closely, especially during periods of high market volatility. You can improve your health factor by repaying debt or adding more collateral.

Layerbank places security at the forefront of its development. The smart contracts powering the protocol are open source and published on GitHub, allowing public scrutiny. The team pursues professional security audits and works with partners across multiple networks to ensure safety. Despite these precautions, DeFi always carries inherent smart contract and market risks, and users should only deposit funds they are comfortable managing.

Your health factor on Layerbank is a numerical representation of the safety of your lending position. It is calculated as the ratio of your weighted collateral value to your total outstanding debt. A health factor above 1 means your position is safe. As the health factor approaches 1, your position becomes riskier and susceptible to liquidation. If it drops below 1, liquidation can occur. You can monitor your health factor in the Manage section of the Layerbank app.

L.Points are Layerbank's loyalty reward system designed to recognize and reward active users of the protocol. You earn L.Points by supplying and borrowing assets across any supported network on Layerbank. The more you interact with the protocol — and the more assets you deploy — the more L.Points you accumulate. These points are tracked in the L.Points tab and may entitle holders to future protocol rewards and distributions.

The LAB token is the native utility and governance token of the Layerbank ecosystem. It serves multiple purposes within the protocol: LAB holders can participate in governance decisions that shape the future development of Layerbank, stake LAB tokens to earn a share of protocol revenues, and access boosted rewards on their supply and borrow positions. The token is integral to the long-term sustainability and decentralization of the Layerbank protocol.

The Earn section of Layerbank is designed to provide additional yield opportunities beyond standard lending APRs. It includes curated strategies, liquidity mining programs, and integration with yield-bearing assets that automatically compound returns. Through the Earn section, users can maximize their capital efficiency while benefiting from the broad multi-chain reach of the Layerbank protocol.

Layerbank separates its markets into Core and Isolated categories. Core markets contain assets with established liquidity, strong track records, and higher collateral factors — they form the backbone of the lending pool. Isolated markets contain newer or more speculative assets with lower collateral factors and separate risk parameters. Borrowing in Isolated markets is limited to reduce systemic risk to the overall protocol, protecting Core market suppliers from exposure to higher-risk assets.

Yes, Layerbank supports Efficiency Mode (E-Mode), which allows users to maximize capital efficiency when supplying and borrowing correlated assets within the same category (for example, stablecoins against stablecoins, or ETH-correlated assets). When E-Mode is active, the collateral factor and liquidation thresholds are significantly improved for eligible assets, allowing users to borrow a higher percentage of their collateral value. You can enable E-Mode from the Manage section of the Layerbank app.

Layerbank uses an algorithmic interest rate model where rates are determined by the utilization rate of each liquidity pool. As more assets are borrowed relative to the total supplied, the utilization rate rises and interest rates increase — incentivizing more suppliers and discouraging further borrowing. Conversely, when utilization is low, rates decrease to attract borrowers. This dynamic model ensures efficient capital allocation and market-responsive pricing across all Layerbank markets.

All Layerbank smart contracts are open source and available on GitHub at the official LayerBank Foundation repository. Comprehensive technical documentation, integration guides, and risk parameters are published on the official Layerbank documentation site (docs.layerbank.finance). These resources are continuously updated to reflect the latest protocol changes and new network deployments.