> For the complete documentation index, see [llms.txt](https://docs.clearpool.finance/clearpool/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.clearpool.finance/clearpool/how-it-works/credit-vaults/for-lenders.md).

# For Lenders

Credit Vaults offer a compelling opportunity to earn returns on your cryptocurrency holdings. Here's how it works:

* **Supply Liquidity:** Contribute to borrowing pools using the pool's specific asset (e.g., USDC for a USDC pool).
* **Smart Contract Security:** Your transaction is recorded on a secure blockchain-based smart contract, ensuring transparency and immutability.
* **Instant Liquidity Transfer:** The funds you contribute are immediately directed to the borrower's wallet.
* **Start Earning Right Away:** Assuming 100% pool utilization (all funds are borrowed), you'll begin accruing interest on your contribution from the moment you supply liquidity.
* **Fungible LP Tokens:** In exchange for your contribution, you'll receive fungible LP Tokens. These tokens are transferrable and represent your share of the pool.
* **Accruing Interest:** Your LP Tokens continuously compounds interest based on the pool's annual percentage rate (APR).
* **Dynamic Exchange Rate:** The exchange rate of your cpTokens increases over time, reflecting the growing interest you've earned.