On Huma, lenders earn a part of the pool's profit by providing liquidity. The V2 Huma protocol defines two tranche types for lenders: senior and junior. A pool might either have a two-tranche structure with both tranches active or a uni-tranche structure with only the junior tranche enabled. If you want to participate in both tranches in a pool where both are active, you must obtain separate approvals.

Lenders in each tranche are split into two groups: one that will automatically receive a yield payout at the end of each epoch, and one that will reinvest all the yield back into the pool. Each tranche can only have up to 100 lenders in the first group. The Pool Owner and Pool Operators decide whether a lender qualifies for automatic yield payout or reinvestment. For more details, refer to the Automatic Yield Payout and Reinvestment section.

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