Due to the pricing dynamics discussed in Pricing & Arbitrage, lenders can be confident that iPTs provide the largest discount and therefore best rate on the market.
Lending (Purchasing iPTs)
In order to "lend", applications purchase iPTs from secondary markets to capture their discount. Once purchased, lenders hold iPTs and wait until maturity for redemption.
Once maturity is reached, lenders can either redeem manually or optionally utilize an automatic redemption process enabled by our implementation of EIP-5095.
This makes lending as simple as purchasing an iPT and... thats it!
While iPTs should in nearly all cases provide the largest discount, off-chain applications can optimize further and utilize the Illuminate API (IlluminAPI).
The IlluminAPI provides a granular response as to the optimal rate and if purchasing iPTs directly is suboptimal, Illuminate provides convenience lending methods for the purchase and wrapping of external PTs.
Like most, Illuminate shares some core risks that come with our integrated DeFi protocols.