Liquidity layer
The Liquidity Layer is the system that connects all parts of Jupiter Lend, Earn, Borrow, and Multiply.
It acts as a shared pool of funds that every product can use, instead of keeping liquidity separated in different places.
This structure makes Jup Lend more efficient: assets supplied in Earn can also support borrowing or leverage activity, which keeps capital active instead of sitting idle.
Main functions
- Capital efficiency: Liquidity is shared between all products, which allows users to borrow more and earn better yields without requiring new deposits for each product.
- High LTVs with low risk: Thanks to its advanced liquidation system, Jup Lend can safely offer higher loan-to-value ratios compared to most protocols.
- Automatic balance control: Borrowing and withdrawal limits adjust in real time. This prevents sudden large movements of funds and keeps the protocol stable during high activity or volatility.
- Smooth user experience: Because liquidity is managed together, users can lend, borrow, or unwind positions easily without facing delays or liquidity shortages.
You don’t interact directly with the Liquidity Layer, but it’s what makes the rest of Jupiter Lend work smoothly and efficiently in the background.
Borrow & Withdrawal Limits - Automated Ceilings
To prevent sudden large movements of liquidity, Jupiter Lend uses an automated system of dynamic ceilings. These ceilings manage how much can be borrowed or withdrawn at any moment, and adjust continuously over time.
This mechanism keeps the protocol stable during volatility or high activity, without restricting normal day-to-day usage.
Borrow Limit
Each asset has:
- Base Limit: The minimum level the borrow ceiling can contract to.
- Max Limit: The maximum level it can expand to.
- Current Borrowable Limit: The active ceiling at any moment in time.
The ceiling expands gradually over 12 hours by up to 25%, until it reaches the Max Limit. This ensures that borrowing capacity grows smoothly rather than in sudden jumps.
Immediate Borrowable = Current Borrowable Limit − Current Total Borrowed
This represents how much users can borrow right now.
Withdraw Limit
Withdraw ceilings work in a similar way but in the opposite direction:
• Base Limit: the minimum level the withdraw ceiling can contract to.
• Current Withdrawable Limit: The active ceiling at a given time.
As withdrawals accumulate, the ceiling gradually decreases over 12 hours by up to 25%, limiting how quickly liquidity can leave the protocol. This protects users and prevents liquidity shocks during extreme market moves.
Immediate Withdrawable = Current Total Supplied − Current Withdrawable Limit
This is how much users can withdraw instantly.
Once the Withdrawable Limit touches the Base Limit, the system effectively opens withdrawals, users can withdraw 100% of their deposits.
How to check the real-time ceilings
You can view the live Borrow and Withdraw ceilings for every asset directly in the Statistics page.
Refinance Limit
For now, Refinance supports migrations up to $1M per operation.
If your position is larger, you can still transfer it, you’ll just need to complete the migration in multiple steps.
Risk management
Jupiter Lend is built with multiple security measures, but using DeFi always involves some level of risk.
Here are the main points to understand before interacting with the protocol.
Main risks:
-
Smart contract bugs
Jup Lend’s programs are audited, but no protocol is completely risk-free. A bug could lead to loss of funds or failed transactions. -
Liquidation risk
If the value of your collateral drops too much, part of your position will be sold to repay the debt. Jup Lend reduces this impact with partial liquidations and a very low penalty (around 0.1%), only applied to the portion that is liquidated. -
Oracle errors
The protocol uses several price sources (Pyth, Chainlink, Redstone). Inaccurate or delayed prices could cause unwanted liquidations or miscalculated health factors. -
Liquidity limits
During extreme market moves, the protocol automatically limits large withdrawals or borrows. This protects the system and gives time for positions to rebalance safely. -
Asset-specific risks
Some tokens, like restaking assets or stablecoins, depend on external providers or mechanisms. Users should understand the risks related to each asset they use.