100% Capital Efficiency
Most lending protocols operate with low capital efficiency because their are generally more lenders than borrowers and borrowers prefer to be able to withdrawal their deposits on demand.
DeFi is becoming more and more competitive, so more efficient protocols that can offer higher real yield will eventually win the majority of the TVL from less efficient competitors.
For most peer-to-pool lending protocols, lenders receive low APY and borrowers pay high APY as lenders prefer to be able to withdraw anytime.
OpenSky passes lender deposits directly to aave.com’s battle-tested money markets, which solves the ‘wasted deposits’ problem common in DeFi lending. Even in the unlikely case of no one borrowing from the pool, the lenders will still enjoy passive income from aave.
For most peer-to-peer NFT lending protocols, like NFTfi, many lenders compete for peer-to-peer loans, but only one lender will fund the loan and walk away happy. Moreover, even if a peer-to-peer lender wins the loan this time, they will have to spend time and gas trying to fund new loans in the future. OpenSky lenders efficiently use their yield-bearing pool liquidity tokens (oTokens) to make or accept Bespoke loan offers. Even if no peer-to-peer loans are executed, the lenders still enjoy the aave pool income.