Venus Protocol enables yield earning on stablecoin deposits while borrowing

Venus Protocol just solved one of DeFi’s most annoying either-or problems: the choice between earning yield on your stablecoins and using them as collateral to borrow. With its new Liquidity Hub, users can now do both at the same time. The feature, which went live around August 31, introduces a mechanism that automatically allocates stablecoin deposits across multiple yield sources while issuing share tokens that remain fully usable within Venus’s lending markets. How the Liquidity Hub works When users deposit stablecoins like USDT or USDC into the Liquidity Hub, they receive ERC-4626 share tokens called vhUSDT and vhUSDC. These tokens accrue yield in the background while simultaneously serving as collateral in Venus’s core lending markets. The vhTokens carry an 80% collateral factor, meaning a user depositing $10,000 worth of vhUSDT could borrow up to $8,000 in other assets. They also come with a 10% liquidation incentive and zero borrow cap, a design choice that keeps the tokens focused purely on their collateral function. Behind the scenes, the Hub allocates deposited capital across Venus Core lending, Flux/Fluid markets, and Fixed-Rate Vaults according to governance parameters....