Introduction

Sivo DeFi works with both institutional capital and accredited private credit sources, including individuals, family offices, and corporate entities. Institutional capital typically forms the senior tranches within capital pools, while private credit providers often participate in mezzanine and junior tranches, offering a flexible risk-return profile.

Capital providers deposit assets into capital pools by connecting a self-custody wallet or generating one through Poe, the protocol's AI assistant. Fiat deposits are digitized and securely managed by a regulated partner until transferred outside the network. Poe assists capital sources in selecting pools that align with their risk tolerance, prioritizing those that match the portfolio's currency, while hedging mechanisms manage currency differences.

Once deposited, capital sources receive sTokens, representing their share of the capital pool. These sTokens automatically accrue interest from borrowing activity and can be redeemed at any time for the underlying asset plus interest. Unlike other protocols, Sivo DeFi compounds interest continuously. Capital sources also earn arrangement fees for loans they help fund, which are added to their balance, and receive a share of the originator’s DEX pool assets when an originator exits the network.

Sivo DeFi employs a dynamic interest rate model, similar to Compound, with a "kink" point where rates rise sharply to preserve liquidity. The protocol maintains a minimum APR of up to 20% or more, adjustable through governance, ensuring attractive returns for capital sources.

sToken holders also earn SVO, the network’s governance token, based on the interest generated within pools. Rewards are split between capital sources and originators, and SVO can be claimed via Poe or API for holding, additional benefits, or governance participation.

If a pool is fully utilized, capital sources join a queue, with priority based on their SVO holdings. Withdrawals from low-liquidity pools may be delayed or paid incrementally to maintain stability. Accredited investor status is required, and unverified sources are removed from pools with their principal returned.

Learn more about participating as a capital source in the following sections, visit our knowledge base, or ask Poe at sivo.xyz.