> For the complete documentation index, see [llms.txt](https://docs.fira.money/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.fira.money/developers/features/variable-rate-lending.md).

# Variable-Rate Lending

## Overview

Fira's variable-rate market operates alongside the fixed-rate system. Borrowers post collateral (wstETH, cbBTC) and borrow USDC at a variable rate that adjusts based on utilization. Lenders deposit USDC into the **SisuVault** (an ERC-4626 vault) to earn variable yield.

{% hint style="info" %}
FW tokens rehypothecate part of their underlying into the variable-rate market on the supply side. This means FW depositors indirectly earn variable-rate lending yield in addition to any other yield sources.
{% endhint %}

## How it works

### Lending (supplying)

Users deposit USDC into the SisuVault and receive vault shares (`mkUSDC`). The vault aggregates deposits and supplies them across lending markets. Yield accrues as borrowers pay interest, increasing the vault's share price over time.

### Borrowing

Borrowers interact directly with the Variable Rate LendingMarket:

1. **Approve** collateral token to the lending market
2. **Supply collateral** via `supplyCollateral(marketParams, amount, user, "")`
3. **Borrow** via `borrow(marketParams, usdcToBorrow, 0, user, receiver)`

Interest accrues continuously based on the `AdaptiveCurveIrm` interest rate model, which adjusts rates based on utilization.

### Repaying

Borrowers approve USDC to the lending market and call `repay(marketParams, assets, 0, user, "")`. The position's borrow balance is reduced accordingly.

### Supported collateral

| Collateral | LTV | LLTV | Oracle                                 |
| ---------- | --- | ---- | -------------------------------------- |
| wstETH     | 87% | 89%  | Morpho wstETH/USDC                     |
| cbBTC      | 88% | 90%  | ChainlinkOracleV2 (BTC/USD + USDC/USD) |

## Key features

* **Variable yield for lenders** — Earn yield proportional to vault share ownership
* **Multiple collateral types** — wstETH and cbBTC supported
* **Adaptive interest rates** — Rates adjust based on market utilization
* **Permissionless** — No whitelist required for variable-rate markets
* **ERC-4626 vault** — Standard vault interface for composability

## Related pages

* [Variable-Rate Lending (User Flow)](/developers/user-flows/variable-rate-lending.md)
* [Repay Variable-Rate Debt (User Flow)](/developers/user-flows/repay-variable-rate.md)
* [Lending Contracts](/developers/protocol-contracts/lending.md)


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