How Lending Incentives Are Distributed
💎 Reward Distribution via Merkl
XLend Lending Pools distribute all incentives through Merkl, a DeFi incentive platform that connects liquidity providers with protocols seeking to boost activity and engagement.
This distribution method applies to both Net Deposit Rewards and Supply & Borrow Rewards across all eligible markets on OP Mainnet and Base.
🔧 How It Works
Merkl smart contracts configure and issue incentives.
User eligibility and reward amounts are calculated by Merkl based on on-chain data (supply, borrow, net deposit).
Rewards stream continuously and are claimable in real time.
Merkl defines the exact logic and parameters for each incentive campaign.
XLend displays estimated APRs and claimable rewards by integrating Merkl data, but doesn't directly control distribution.
Users can claim rewards through either XLend or the Merkl Claim Portal.
🧊 Rewards Are Distributed in exToken Format
Some XLend lending pools distribute rewards in the form of exTokens (e.g., exOptOP, exOptUSDC). These are special recipient tokens that represent your lending position on XLend.
🔧 How It Works
Rewards accumulate continuously and are claimable in real time.
When using an exToken-enabled pool, your rewards are issued as exTokens, which act as both:
Your lending position token, and
Your reward-bearing token
You can redeem exTokens 1:1 for the underlying asset at any time through the XLend interface.
Here’s how it works in practice:
Step 1: Click “Claim” to receive your reward as an exToken (e.g., exOptOP).
Step 2: Go to the Portfolio tab to view your supplied position in exTokens.
Step 3: You can choose to keep this position to continue earning yield,
or simply click “Withdraw” to redeem it for the underlying asset (e.g., OP) and exit the position.
Note: If you earned rewards from a Base pool, but the rewards are in exOptOP,
you’ll need to switch to Optimism to claim and manage your reward position.
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