# pTokens

A user can deposit assets into Perlin to mint pTokens, NEP-17 tokens representing balances on the protocol. A segment of these deposited assets becomes accessible for lending by the protocol, accuing interest for the depositor.

For example, a user can deposit Neo into Perlin to mint pNEO. By doing so, the user's NEO will become available to borrowers, and the depositor accrues interest at the NEO supply rate.

Lenders earn interest by minting pTokens. The interest earned by the protocol isn't distributed; instead, the exchange rate for pTokens changes, and users will be able to redeem more assets over time as interest is earned.

Borrowers use pTokens as collateral to borrow other omnichain assets. Collateral pTokens also earn interest, potentially offsetting some of the borrow costs.
