> For the complete documentation index, see [llms.txt](https://polter.gitbook.io/polter/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://polter.gitbook.io/polter/lending-and-borrowing.md).

# Lending and Borrowing

Lenders deposit assets into the same asset pool that borrowers withdraw from.

In order for borrowers to be able to borrow, they need to have assets collateralized by lending assets into the same pool they wish to borrow from. The amount they can borrow is determined by the particular LTV (Loan to Value) rate of their collateralized asset pool (e.g. depositing $1000 FTM with a LTV of 30% allows max borrowing of $300).

### Withdrawals

Lenders who want to withdraw their collateral can only do so provided there is sufficient liquidity in the asset pool (i.e. The maximum borrowable amount per that pool’s LTV has not already been reached)

### Lending Rates

The Deposit and Borrow interest rate of each pool fluctuates based on the utilization rate (% loaned out) of the asset. The interest rate is based upon an interest rate "curve". It is represented by 2 linear slopes that change based on the optimal utilization rate. After the optimal utilized rate, the slope becomes steeper, which represents the rapid rise in interest rates necessary to encourage more deposits and less borrowing.

Each asset pool has its own interest rate "curve".

### Incentives

Lenders and borrowers receive $POLTER tokens as incentives for their participation.

Lenders will receive $POLTER tokens on top of their deposit interest rates.

Borrowers will receive $POLTER tokens to compensate for their borrow interest rates.

See [Platform Fees](/polter/platform-fees.md) for more details.


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