Key Features
Re-Lending
Re-lending forms the supply side of the 246 Club market, functioning as a senior tranche that consistently earns Aave’s base rate (the most risk-adjusted yield in DeFi) while capturing additional yield through interest-rate arbitrage. Re-lenders receive indirect exposure to risk, which is mitigated by the junior-tranche equivalent (borrowers) in the market.Cross-Protocol Arbitrage
Deposit collateral into high-yielding positions and borrow from lending protocols with the best interest rates to leverage arbitrage opportunities. e.g., capturing the spread between Aave and Morpho by depositing USDC into a Morpho Vault (high yield) and using it as collateral to borrow from Aave (low borrow rate), then leveraging this position for higher returns.Thesis
- DeFi growth fuels lending market expansion. New capital and value flowing into DeFi are wrapped and grow exponentially through a credit multiplier effect as they integrate with lending markets. Lending markets fuel DeFi growth, and DeFi drives lending market expansion. These markets expand horizontally, with isolated and independent markets created for each new asset or yield class onboarded on-chain. Because of unique collateral characteristics and market specifics, rates are dislocated and dynamic across each market. As DeFi grows, lending markets expand horizontally to meet leverage demands, creating more dislocated rates and interest-rate spreads.
- Lending markets are the ultimate downstream value-capture funnel of DeFi. New yield sources, stablecoins, and assets come and go, but lending markets, positioned downstream, consistently capture value from DeFi’s expansion by rotating across the best opportunities. Interest-rate arbitrage is not only about exploiting local supply and demand imbalances; it is also about passively capturing new assets, value, and yields in DeFi without managing individual opportunities at the base layer.
- A conduit connecting credit and yield, the two core pillars of finance. The core principle of lending, and finance, is directing idle capital to its most productive use; capital flows to the highest returns, much like water seeking the lowest ground. 246 Club scales this dynamic from individual lenders and borrowers to a protocol-to-protocol level, creating a marketplace that connects surplus liquidity to high-return strategies and captures the spread. As new asset classes and yield opportunities emerge, markets fragment further, each with distinct risk–return profiles. This fragmentation amplifies inefficiencies, and 246 Club is well positioned to thrive in this environment.