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description: LENX Lend Lending Mechanism
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# Lending

**Lenders** are awarded an equivalent number of Asset Shares (lTokens) based on the prevailing Share Price when they invest Asset Tokens into a Pair.

Lenders have the flexibility to swap their lTokens for the original Asset Tokens according to the current market rate. The value of lToken Share Price escalates as interest accumulates.

The accumulation of interest is the sole factor that can alter the Share Price. Given that the accumulation of interest is inherently positive, the quantity of Asset Tokens redeemable per lToken will never diminish.

**Lending Scenario**

Consider Alice, who contributed 100 xBTC tokens for lending, receiving 100 lxBTC at an initial Share Price of 1.00. Following her deposit, the pair generated 10 xBTC in interest, resulting in a total of 110 xBTC (100 initial xBTC + 10 xBTC in interest). The current lxBTC Share Price thus adjusts to 1.10 (calculated as 110 xBTC divided by 100 lxBTC).

**Asset Vault Account Overview**

* **Total Amount:** 110
* **Shares:** 100
* **Alice's lToken Balance:** 100
* **Bob's lToken Balance:** 0

Should Bob later contribute 100 xBTC for lending, the total pool amount would increase by his contribution. With the Share Price at 1.10, Bob is allocated 90.91 (100 / 1.10) lTokens for his deposit, altering the Asset Vault Account as follows:

**Asset Vault Account Revised**

* **Total Amount:** 210
* **Shares:** 190.91
* **Alice's lToken Balance:** 100
* **Bob's lToken Balance:** 90.91

With the further accrual of 20 xBTC in interest, the Asset Vault Account updates to:

**Asset Vault Account Further Updated**

* **Total Amount:** 230
* **Shares:** 190.91

This adjustment elevates the Share Price to 1.2048 (230 xBTC divided by 190.91 lxBTC), enabling Bob to redeem his 90.91 lxBTC for 109.52 xBTC, while Alice can exchange her 100 lTokens for 120.48 xBTC.

As interest continues to be generated over time, both Alice and Bob have the opportunity to redeem their lTokens for a progressively larger amount of the underlying asset.
