# Lending System

Patronus lending service is based on the Peer-to-Pool model. 

The lender deposits the assets in the corresponding public liquidity pool, while the borrower can lend the assets from the liquidity pool after depositing the qualified collateral. 

When the borrower repays the loaned assets with interest payable to the corresponding liquidity pool, the interest will be distributed to all the lenders according to their deposit proportion. 

Users can withdraw or repay at any time without paying attention to the loan term.

<figure><img src="/files/s71rKtprMTlnBayuNlqc" alt=""><figcaption></figcaption></figure>

●   **Lending:** The assets lent to the pools are represented by wCoin balance (such as "wAPT"). As the liquidity pool continues to generate and distribute the repaid interest, the unit wCoin could be progressively converted into an ever-growing amount of basic assets. In this way, earning interest is as simple as holding wCoin.

●   **Borrowing:** Users can deposit wCoin as collateral to obtain a corresponding loanable quota and repay whenever they like. Similar to lending, the floating interest rate of each liquidity pool is determined by the market and defines the borrowing cost of each asset.

●    **Risk and Liquidation:** When a borrower's outstanding loan exceeds the loanable quota as calculated by their collateral value, the system will put the user's collateral assets into the liquidation process in order to ensure the overall security of the liquidity pool. Liquidators can call the corresponding contract to buy the collateral assets with a specific discount ratio. Each asset may have a different collateral rate and liquidation penalty due to their difference in market size, liquidity, price volatility, etc.


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://wiki.patronus.fi/technical-framework/lending-system.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.