# Supplying Assets

#### **How Supplying Works**

1. **Depositing Assets** – Users supply **Asset Tokens** to the lending pool, making them available for borrowers.
2. **Accruing Interest** – As borrowing activity generates interest, the total value of the pool increases. Lenders' claims grow proportionally, ensuring they earn yield over time.
3. **Withdrawing Deposits** – Lenders can redeem their share at any time, receiving their original Asset Tokens plus accrued interest. The withdrawal amount depends on the pool's current market rate and available liquidity.

All lending and borrowing balances are tracked within Echelon’s smart contracts, ensuring automated and accurate accounting.

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#### **Interest Rates & Supply APR**

* The **Supply APR** represents the annualized return that lenders earn on deposited assets.
* Interest accrues automatically and compounds over time, increasing the lender’s redeemable balance.
* Supply APR fluctuates based on **asset utilization**, where:
  * **Higher utilization** (more borrowing) increases yields for lenders.
  * **Lower utilization** (less borrowing) decreases yields.

Lenders do not need to manually claim interest—it is reflected in their growing claim on the lending pool.

***

#### **Example Supplying Scenario**

A user deposits **10,000 USDC** into the Echelon lending pool, where the **Supply APR** is **5%**. If they keep their deposit for one year without withdrawals:

* **Interest Earned** = 10,000 × 5% = **500 USDC**
* **Total Redeemable Balance After One Year** = **10,500 USDC**

If the user withdraws earlier, they receive a proportional amount based on accrued interest up to that point.


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