<figure class="wp-block-image size-large"><img width="325px" height="183px" srcSet="https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/07/14182434/Stability-Pool-APR-375x211.webp 375w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/07/14182434/Stability-Pool-APR-662x372.webp 662w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/07/14182434/Stability-Pool-APR-768x432.webp 768w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/07/14182434/Stability-Pool-APR.webp 688w" sizes="(max-width: 425px) 150px, 450px" src="https://ll-blog-dev.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2023/07/14182434/Stability-Pool-APR.webp" alt="Stability Pool APR" class="wp-image-3372"/></figure>



The Stability Pool APR is not constant.



Rather, it fluctuates up and down based upon market conditions.



Learn the factors that influence the Stability Pool yield so you make the best decisions with your <a href="https://www.thecoinzone.com/liquidloans/usdl-crypto" target="_blank" rel="noreferrer noopener">USDL</a> dry powder. 



<h2 class="wp-block-heading tablecontent">What is the Stability Pool?</h2>



The <a rel="noreferrer noopener" href="https://www.thecoinzone.com/liquidloans/stability-pool" target="_blank">Stability Pool</a> is the first line of defense to ensure system solvency in the Liquid Loans protocol.



The Stability Pool is a smart contract full of USDL which is responsible for paying back vaults with a <a href="https://www.thecoinzone.com/tradfi/what-is-collateral-ratio" target="_blank" rel="noreferrer noopener">collateral ratio</a> of less than 110% PLS/USDL value.



In other words, the Stability Pool is the source of funds during automatic liquidations.



Since the value of the liquidated vaults is higher than the repayed debt, Stability Providers earn a profit during <a rel="noreferrer noopener" href="https://www.thecoinzone.com/liquidloans/how-to-not-get-liquidated" target="_blank">liquidations</a>.



For example, if the Stability Pool pays $1000 worth of USDL to liquidate a vault with $1099 worth of PLS, it quickly earns $99 worth of value. 



The Stability Pool also earns rewards in the form of <a rel="noreferrer noopener" href="https://www.thecoinzone.com/pulsechain/loan-token-ultimate-guide" target="_blank">LOAN token</a> emissions. 



<h2 class="wp-block-heading tablecontent">What Factors Influence the Stability Pool APR?</h2>



There are 4 factors which influence Stability Pool APR:



<ol>
<li>The Amount of Liquidations. Since Stability Pool is paid for buying low-collateral Vaults at a premium, the more liquidations, the higher the APR.</li>
</ol>



<ol start="2">
<li>The Size of Liquidations. Similarly, the more value in the liquidated vaults, the more value in $PLS which will be distributed to the Stability Providers.</li>
</ol>



<ol start="3">
<li>How Quickly Vaults are Liquidated. A vault can be liquidated at 109.999% or even under 100%. So, the sooner a user triggers the liquidation mechanism, the better.</li>
</ol>



<ol start="4">
<li>Early Adoption. Stability Providers are rewarded with LOAN token emissions. The amount of LOAN token decreases over time, so the earlier Stability Providers will earn more than later ones. </li>
</ol>



<h2 class="wp-block-heading tablecontent">The Best Time to Provide Stability to Liquid Loans</h2>



The best time to provide stability for the <a href="https://www.thecoinzone.com/defi/what-is-liquid-loans" target="_blank" rel="noreferrer noopener">Liquid Loans Protocol</a> would be during a bear market and early in the system.



During bear markets, the prices fall which would push the collateral levels of vaults down, possibly increasing the rates of liquidation. 



In addition, holding USDL, a stablecoin, during a bear market would decrease your exposure to downside price volatility.

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<figure class="wp-block-image size-large"><img width="325px" height="183px" srcset="https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/07/14182434/Stability-Pool-APR-375x211.webp 375w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/07/14182434/Stability-Pool-APR-662x372.webp 662w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/07/14182434/Stability-Pool-APR-768x432.webp 768w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/07/14182434/Stability-Pool-APR.webp 688w" sizes="(max-width: 425px) 150px, 450px" src="https://ll-blog-dev.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2023/07/14182434/Stability-Pool-APR.webp" alt="Stability Pool APR" class="wp-image-3372"/></figure>



The Stability Pool APR is not constant.



Rather, it fluctuates up and down based upon market conditions.



Learn the factors that influence the Stability Pool yield so you make the best decisions with your <a href="https://www.thecoinzone.com/liquidloans/usdl-crypto" target="_blank" rel="noreferrer noopener">USDL</a> dry powder.&nbsp;



<h2 class="wp-block-heading tablecontent">What is the Stability Pool?</h2>



The <a rel="noreferrer noopener" href="https://www.thecoinzone.com/liquidloans/stability-pool" target="_blank">Stability Pool</a> is the first line of defense to ensure system solvency in the Liquid Loans protocol.



The Stability Pool is a smart contract full of USDL which is responsible for paying back vaults with a <a href="https://www.thecoinzone.com/tradfi/what-is-collateral-ratio" target="_blank" rel="noreferrer noopener">collateral ratio</a> of less than 110% PLS/USDL value.



In other words, the Stability Pool is the source of funds during automatic liquidations.



Since the value of the liquidated vaults is higher than the repayed debt, Stability Providers earn a profit during <a rel="noreferrer noopener" href="https://www.thecoinzone.com/liquidloans/how-to-not-get-liquidated" target="_blank">liquidations</a>.



For example, if the Stability Pool pays $1000 worth of USDL to liquidate a vault with $1099 worth of PLS, it quickly earns $99 worth of value.&nbsp;



The Stability Pool also earns rewards in the form of <a rel="noreferrer noopener" href="https://www.thecoinzone.com/pulsechain/loan-token-ultimate-guide" target="_blank">LOAN token</a> emissions.&nbsp;



<h2 class="wp-block-heading tablecontent">What Factors Influence the Stability Pool APR?</h2>



There are 4 factors which influence Stability Pool APR:



<ol>
<li>The Amount of Liquidations. Since Stability Pool is paid for buying low-collateral Vaults at a premium, the more liquidations, the higher the APR.</li>
</ol>



<ol start="2">
<li>The Size of Liquidations. Similarly, the more value in the liquidated vaults, the more value in $PLS which will be distributed to the Stability Providers.</li>
</ol>



<ol start="3">
<li>How Quickly Vaults are Liquidated. A vault can be liquidated at 109.999% or even under 100%. So, the sooner a user triggers the liquidation mechanism, the better.</li>
</ol>



<ol start="4">
<li>Early Adoption. Stability Providers are rewarded with LOAN token emissions. The amount of LOAN token decreases over time, so the earlier Stability Providers will earn more than later ones.&nbsp;</li>
</ol>



<h2 class="wp-block-heading tablecontent">The Best Time to Provide Stability to Liquid Loans</h2>



The best time to provide stability for the <a href="https://www.thecoinzone.com/defi/what-is-liquid-loans" target="_blank" rel="noreferrer noopener">Liquid Loans Protocol</a> would be during a bear market and early in the system.



During bear markets, the prices fall which would push the collateral levels of vaults down, possibly increasing the rates of liquidation.&nbsp;



In addition, holding USDL, a stablecoin, during a bear market would decrease your exposure to downside price volatility.&nbsp;

EXPLAINED: What Influences Stability Pool APR? (Yield in $PLS and $LOAN)

The Stability Pool yields $PLS and $LOAN for stability providers. Learn what factors impact the APR.