Holding a bunch of spot assets in hand, watching the bear market seem endless, besides holding tight and waiting for the bull to come, there are actually other ways to make money. Lending protocols, simply put, are about making your idle assets work — earning interest without frequent operations, which is perfect for friends planning to hold long-term.

**Basic Logic of Lending**

Depositing assets to earn interest is the most fundamental approach. Taking the Sui ecosystem as an example, protocols like Suilend, NAVI, and AlphaLend all follow this path. You deposit your tokens, and the system starts calculating interest for you — straightforward and simple.

But there’s a key concept called Loan-to-Value ratio, abbreviated as LTV. How to understand it? If you deposit BTC and a smaller altcoin, the amount you can borrow against BTC is much higher because BTC is widely recognized as a reliable asset; the smaller coin can only be borrowed in small amounts, since it might crash at any time.

Real numbers example: depositing SUI with an LTV of 80%; depositing small tokens like FUD might have an LTV of only 10%. The difference is significant.

**Health Factor and Liquidation Risk**

Once you start borrowing, the system calculates a metric called "Health Factor" — simply put, it’s the ratio between your borrowing capacity and your actual debt. The more you borrow, or the more the collateral asset’s price drops, the lower this health factor becomes, approaching liquidation.

Real example: depositing 100 USDT worth of SUI, with an LTV of 80%, means you can borrow up to 80 USDT in USDC. This borrowed amount can be used for various DeFi operations, while the original SUI continues earning interest. But the key is to keep the health factor from dropping too low, or the protocol will forcibly liquidate your collateral.

For long-term holders, this mechanism can build a sustainable on-chain cash flow — maintaining exposure to core assets while earning additional income from idle assets, with relatively manageable risk.