No Vault? No Problem! Here Are 5 Other Ways to Earn With Liquid Loans

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By Connor
Estimated reading: 5mins
no vault no problem

You don’t need to open a Vault to earn yield with Liquid Loans.

Don’t get us wrong, collateralizing PLS and taking out a decentralized interest-free loan is a great way to unlock the value of your coins without selling them.

But it’s not the only way to take part in amazing (and profitable) DeFi experiences. 

So, if you haven’t got a Vault, this one’s for you.

Here are five ways to extract value from the Liquid Loans protocol right now, without opening a Vault.

1. Earn Through the Staking Pool

The Staking Pool allows users to stake LOAN token, which can be a great way to earn hefty rewards in the form of both PLS and USDL.

This yield comes from the redemption fees (in PLS) and issuance fees (in USDL) that are collected by the Liquid Loans protocol.

The Staking Pool APR has been well above 60% for the first three months of LL’s launch, and users are finding creative ways to use their yield.

With their PLS rewards, some users like to cycle their coins into a Vault, or use it to buy more LOAN to recycle into the Staking Pool. 

With their USDL, some users are choosing to place their stablecoins in the Stability Pool to earn more LOAN–which can then be staked to earn even more.

There is simply no shortage of opportunities to compound yield within the protocol.

2. Contribute to the Stability Pool

LL Alternate Use Cases

Another way to earn with Liquid Loans is by buying USDL and staking it in the Stability Pool.

The Stability Pool can be thought of as a single-sided liquidity pool. 

When you stake USDL, you provide liquidity to automatically buy liquidated PLS at a discount. 

Through this liquidation mechanism, you can earn great yield in the form of PLS.

Additionally, you earn LOAN on a time-based emission schedule. This halves every year, decreasing the rate of inflation.

Stability Pool yields are extremely high for a stablecoin. This is currently estimated as being as high as over 90% APR–and no, it’s not too good to be true. 

For more information, read this article on how to deposit USDL in the Stability Pool.

3. Make Money Liquidity Providing

Regardless of whether or not you have a Vault, you can earn easily by providing liquidity.

To do so, you can use the yield you’ve already earned from the Staking Pool or the Stability Pool.

Alternatively, you can just buy USDL, LOAN, and PLS and use it to provide liquidity.

By becoming a liquidity provider, you are helping others make decentralized token swaps while earning a sizable yield in the process. 

PulseX is the most liquid decentralized exchange on PulseChain. Here, you can use your tokens to support liquidity pools such as USDL/PLS, LOAN/PLS, LOAN/USDL and more.

Check out our guide to becoming a liquidity provider to learn more.

4. Cash in on Liquidations

Liquidations are an easy way to make 200 USDL–if you’re fast enough.

Any vault which falls below a 110% collateral ratio, is put up to a public call for liquidation.

This means that any user, regardless of whether they use other functions of the protocol or not, can execute the liquidation. 

As a reward, they receive the Liquidation Reserve of 200 USDL as well as 0.5% of the liquidated PLS. 

Liquidations also support the health of USDL, making sure the stablecoin always remains overcollateralized. 

But this can be a competitive way to earn, as only the first user to liquidate a Vault will receive the reward.

5. Redeem Your Way to the Top

The final way to use Liquid Loans without opening a Vault is to perform redemptions.

The act of redeeming simply involves turning each 1 USDL that you own back into the equivalent value of PLS.

This can be done by anyone at any time, through the Liquid Loans dApp.

Since the system always treats 1 USDL as being equivalent to $1 US dollar worth of PLS, you can earn a profit by redeeming USDL whenever its price falls below 99.5 cents on the open market.

When using this method, make sure to take into account that there is a variable redemption fee between 0.5-5%. Ideally, you should add this to your calculations when deciding when to redeem.

If you’re looking for more on redemptions, you’re in luck. We’ve written a guide on how to redeem USDL for PLS.

The Bottom Line

If you don’t want to open a Vault, there are still many ways to use Liquid Loans to your benefit.

  1. You can deposit LOAN in the Staking Pool and earn the borrowing and redemption fees.
  2. You can deposit USDL in the Stability Pool and earn liquidation gains.
  3. You can provide liquidity to facilitate decentralized trading and earn fees.
  4. You can liquidate under collateralized vau liquidate undercollateralized Vaults to earn a quick 200 USDL and a chunk of PLS.
  5. And finally, you can redeem USDL for $1 of PLS if the price falls.

Liquid Loans is about so much more than just lending; it’s about delivering a world of value to DeFi as a whole.

Despite how easy and lucrative it is to open a Vault, we’re not here to tell anyone what to do in DeFi. 

You can still earn tremendous value by accessing other parts of the Liquid Loans protocol, and you’re always free to forge whatever path best suits you.

Head to the Liquid Loans dApp today to start taking advantage.

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Disclaimer:Please note that nothing on this website constitutes financial advice. Whilst every effort has been made to ensure that the information provided on this website is accurate, individuals must not rely on this information to make a financial or investment decision. Before making any decision, we strongly recommend you consult a qualified professional who should take into account your specific investment objectives, financial situation and individual needs.

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Connor is a US-based digital marketer and writer. He has a diverse military and academic background, but developed a passion over the years for blockchain and DeFi because of their potential to provide censorship resistance and financial freedom. Connor is dedicated to educating and inspiring others in the space, and is an active member and investor in the Ethereum, Hex, and PulseChain communities.

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