On Lyra, the cash asset, referred to as the quote asset, is USDC. Users can hold a positive cash balance (credit) or a negative cash balance (debit), enabling a native lending market. When a user borrows USDC, for example, against their deposited WETH collateral, their cash balance becomes negative. Users with a negative cash balance pay interest on the borrowed amount, which is distributed to all users with a positive cash balance. The interest rate paid by borrowers is dynamic and depends on the total negative cash balances versus positive cash balances in the system.

Learn more about borrowing and lending here.