# Lender

Lenders, also known as Liquidity Providers, play a critical role in the Arkis ecosystem. They supply digital assets to [Liquidity Pools](https://docs.arkis.xyz/home/concepts/market) and earn passive yield on their investments—all while avoiding impermanent loss or direct market risk.

### Key Points

* **Asset Contribution**
  * Lenders deposit approved tokens (such as stablecoins or other whitelisted assets) into designated Liquidity Pools.
* **Earning Passive Yield**
  * Once deposited, these assets generate a passive yield. The yield comes from the interest generated by the borrowing activities in the pool.
  * Lenders enjoy a stable return on their capital without exposure to impermanent loss.
* **Risk Mitigation**
  * The structure of liquidity pools, combined with whitelisting and rigorous risk management, protects lenders from market volatility.
  * Arkis Protocol ensures that Lenders get their assets back by estimating the value of provided collateral inside **Margin Account** and **Liquidating** the collateral if it drops below certain value.
* **Operational Simplicity**
  * Lenders can easily deposit or withdraw funds based on the pool’s conditions, keeping the process straightforward and efficient.