246 Club in One Page

This single page alone provides a complete and clear understanding of 246 Club’s functionality and purpose.

Re-Lending

Re-Lending allows users to maximize yield by combining the baseline yield from Aave deposits with additional yield from 246 Club.

Re-Lenders remain passive, earning Aave’s baseline yield plus additional returns captured from interest rate arbitrage activities of active borrowers.

Users supply either an aToken (e.g., aUSDC) or its underlying asset (e.g., USDC).

What assets can be Re-Lent :

• If you supply an underlying asset, it is first deposited into Aave to generate an aToken, which is then re-lent to 246 Club.

• If you supply an aToken directly, it is re-lent to 246 Club.

In both cases, the result is a Re-Lending position in the 246 Club market.

How it works ( Credit Delegation ) :

• When you lend to Aave (e.g., 100 USDC), you receive an aToken as a receipt of your deposit (e.g., 100 aUSDC) and gain borrowing power based on Aave’s LTV ratio. For example, with an 80% LTV, you can borrow up to 80 USDC.

• By re-lending your aToken (e.g., 100 aUSDC) to 246 Club, you delegate this borrowing power( e.g., 80USDC in this case ) to the protocol.

• Borrowers on 246 Club utilize this borrowing power and pay additional interest, which generates the extra yield for your Re-Lending position.

You cannot borrow against a re-lending position from 246 Club.

Cross-Protocol Loan

The Cross-Protocol Loan enables borrowers to deposit collateral in one protocol (e.g., Morpho Earn Vault) and borrow against it from another (e.g., Aave).

This allows borrowers to earn yield on their collateral in one protocol while taking advantage of borrowing opportunities in another.

How it works:

• Users can deposit collateral into Morpho (e.g., a Morpho Vault position) and borrow assets from Aave.

• If you don’t have an existing Morpho position, 246 Club’s user interface allows you to “zap” into a Morpho Vault position and immediately borrow against it from Aave.

• This setup supports interest rate arbitrage between yield from Morpho deposits and borrowing rates from Aave.

Loan Management:

• Once established, the loan position must be maintained to ensure a healthy loan-to-value ratio, similar to other lending markets. ( see Managing Loan Position for details )