Boost: The Coverage Layer

Boost is the other side of the protection system. Protected depositors earn stable yield with coverage, while Boost depositors earn higher yield by providing that coverage. The entire mechanism is transparent and on-chain, allowing you to see exactly what you are underwriting and what you are being paid for it.

How It Works

Boost deposits earn from two sources:

1. Lending yield. The same base yield from integrated protocols that all Lulo deposits earn.
2. Protection premiums. A share of interest from Protected deposits, paid as compensation for underwriting coverage.

The premium scales inversely with the Boost-to-Protected ratio. Fewer Boost depositors relative to Protected means higher premiums for each Boost participant.

The Risk

Boost is a first-loss position. If a covered protocol suffers a loss event, Boost capital absorbs the impact before it reaches Protected depositors.

• Partial protocol failure. Boost deposits cover losses up to their total amount.
• Severe protocol failure. Boost depositors may lose partial or complete deposits depending on severity.

The tradeoff is higher yield in exchange for bearing the first-loss risk that Protected depositors are shielded from.

Lockup

Boost deposits have a lockup period. Boost capital underwrites the coverage system, so it needs to remain available to compensate Protected depositors if a covered event occurs. This is a structural requirement, not an arbitrary restriction.

Transparency

Everything about Boost is on-chain. You can see the current coverage ratio, how much you are earning in premiums, which protocols your capital is underwriting through systematic allocation informed by TVL and rate, and the overall health of the coverage pool. All of this information is available before and after you deposit.

Fees

Lulo charges a 10% performance fee on yield generated, with no deposit fees or hidden costs.

Who Boost Is For

Boost is designed for users with higher risk tolerance who want superior returns by underwriting protection. You can see exactly what you are exposed to, and you are compensated accordingly for taking on that risk.