Lending and Borrowing Campaigns

Merkl natively supports all lending and borrowing protocols that issue receipt tokens for lenders and debt tokens for borrowers. However, it also extends support to:

• Lending protocols that don’t follow this standard structure.

• Tailored incentive campaigns—for example, rewarding users based on their net lending position (lending minus borrowing).

As a campaign creator, you have the possibility to enable net lending on a specific opportunity. When enabled, users will not get extra rewards by borrowing the same asset and re-lending it again. This is to ensure there are no infinite loops & unefficient TVL (e.g if you lend $100 wstETH and borrow $60 USDC, you get rewarded for $100 wstETH)

Note: this is not always the case. If you’ve got a doubt about net lending when preparing a campaign, feel free to reach out to us.

Some notable custom integrations include Silo, Radiant, Morpho, Ajna, Euler, and Compound V2 (along with its forks).

From a user perspective, interacting with these custom lending protocols feels the same as with standard ones. Merkl’s engine abstracts away protocol-specific differences, ensuring a consistent UX and feature set.

This means that campaign creators can also customize:

• their campaign hooks (e.g. blacklisting, whitelisting systems, forwarding mechanisms, ...)

• their distribution methods (e.g fixed APR, variable APR, ...)

If you want your lending and borrowing protocol to be fully integrated and supported by Merkl, or to create tailored protocol-campaigns, please contact us on the Merkl Discord by opening a BD ticket to discuss the integration process.

Here are below some specificities you may face with some lending protocol integrations on Merkl.

Morpho

When creating a campaign for a Morpho pool, you'll be asked to input the following parameters:

• Usage: From the dropdown menu, select the usage type (MetaMorpho, Supply, Borrow, Collateral) you want to incentivize. Choosing MetaMorpho will incentivize a MetaMorpho vault, while selecting Supply, Borrow, or Collateral will incentivze a Morpho Blue market.

• Market ID: Specify the Market ID. For MetaMorpho, select the desired MetaMorpho vault to incentivize. For Morpho Blue, choose whether to incentivize the supply, borrow, or collateral for a specific Morpho Blue market. You also have the option to manually enter the asset address for any type of Market ID.

Radiant

You'll be asked to set a cap parameter in USDC. This is used by Radiant: if you're not the Radiant protocol you should set it to 0.

Silo

Like on Morpho, there are some custom parameters to choose:

• Usage: Select the specific usage for your Silo campaign (Deposit, Protected Deposit, or Debt).

• Version: Choose the version of Silo (Silo Legacy, or Silo Llama).

• Asset: Select the asset to incentivize from the dropdown menu or enter the asset address manually.

The blacklist/whitelist features also come handy here as you may use it to automatically blacklist silos that should not receive rewards.