Lending

Lending is also an integral part of the system, as important as borrowing. Anyone can lend USDC or other coins to the protocol, which will be used for issuing loans to borrowers. Lending USDC to Ember Network is pretty straightforward because

• no slashing risk like in PoS systems

• no risk of impermanent loss like in AMMs

• a liquidity token issued which represents the tokens you lent

Your lending position is represented by a liquid token. Interest accumulated over time is added to this token’s value. Theoretically, the value of this token will always go up, because the token represents the underlying assets + accumulated interest, and more interest will keep accumulating with time. The liquid token can be sold in the open market, or can be used to unlock funds from the Ember Network. Similarly, if someone wishes to benefit from Ember Ecosystem, they can buy these liquid tokens from the open market, or simply lend funds to the protocol and receive liquid tokens representing their lending position.