Inertia operates a sophisticated money market that enables users to deposit and borrow assets with ease. As a modular protocol, it integrates assets from multiple chains and rollups into a unified lending pool​.

Users can supply assets (such as stablecoins, LSTs, or LRTs) to earn interest, or borrow by providing collateral, much like traditional DeFi lending platforms. However, Inertia extends beyond typical lending by incorporating yield-enhancing strategies and cross-chain flexibility:

  • LRT and LST Collateral: Inertia accepts Liquid Staking Tokens and Liquid Restaking Tokens as collateral, unlocking the liquidity of staked assets. This means users who have staked or restaked assets can borrow against them without unstaking, maintaining their staking rewards while obtaining a loan​. By supporting these tokens, Inertia enhances capital efficiency — staked assets become productive collateral rather than idle assets.
  • Idle Asset Yield Management: Inertia maximizes lenders’ returns through an idle asset yield management system. Idle funds in the lending pool (e.g. unborrowed stablecoins) are automatically allocated to high-yield opportunities across DeFi, generating extra interest for depositors​. This ensures that even when demand for loans is low, lenders still earn yield on their assets beyond the standard borrow interest rate.
  • Leveraged Staking and Farming: Because collateral can earn yield, Inertia enables leveraged optimization strategies. For example, a user can deposit LSTs as collateral, borrow stablecoins, and reinvest in more staking or yield farming. Inertia’s design supports leveraged yield farming and leveraged staking (restaking) in a single platform, giving users the ability to amplify returns. Advanced users can loop deposits and borrows to multiply their exposure, all while the protocol manages the associated risks and interest rates.
  • Modular and Cross-Chain Integration: As part of the Initia ecosystem, Inertia is built to be modular and interwoven with other application-specific rollups. Assets like Initia’s INIT and Celestia’s TIA can be utilized on Inertia’s market, bridged via the ecosystem’s interoperability. This modular design means Inertia’s lending pools can tap into a wide range of tokens and LST/LRT assets from various chains, creating a diverse and robust lending market. By consolidating liquidity in one place, Inertia minimizes fragmentation and improves borrowing capacity for all users.
  • Initia’s VIP Rewards: Inertia is uniquely positioned as a core protocol in the Initia universe that allows significant advantages in attracting more INIT into the ecosystem. This advantage gives Inertia increased concentration of INIT, which further amplifies opportunities for the user to capture a larger share of Initia’s VIP rewards for example – which remains one of the ecosystem’s most critical features.

The result is a self-reinforcing flywheel:

  1. More INIT supplied to Inertia
  2. Higher VIP allocations secured
  3. Greater reward distribution to Inertia users

This positive feedback loop allows Inertia users to receive meaningfully higher incentives compared to other L2s within the Initia Ecosystem.