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Interest Bearing

An “interest bearing” smart contract is indicative of Lending protocols. Interest bearing smart contracts are ERC-20 contracts at their core. The interest bearing derivative token is pegged to the value of the corresponding deposited asset and can be stored, transferred, and traded just like any other ERC-20 token. All interest collected by the token’s reserves are distributed to the various token holders directly via their wallets.

Note: These are non-technical definitions meant for a general audience and should not be used as legal definition
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