> For the complete documentation index, see [llms.txt](https://docs.lendsprotocol.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.lendsprotocol.com/start-here/tokens-and-ways-to-participate.md).

# Tokens & Ways to Participate

LENDS uses a small set of assets with different jobs. Understanding the difference between them makes the protocol much easier to use.

## At a Glance

| Asset            | What it is                                                                  | Why a user holds it                                                                                                   |
| ---------------- | --------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- |
| Tokenized stocks | Supported onchain representations of stocks, ETFs, or similar market assets | Deposit as collateral and retain price exposure while borrowing leUSD                                                 |
| leUSD            | The protocol's USD-denominated stable asset                                 | Use borrowed liquidity, repay debt, stake for revenue, or convert to USDG through the PSM                             |
| USDG             | The reserve stablecoin used by the PSM                                      | Convert 1:1 into leUSD and provide reserve backing                                                                    |
| sleUSD           | A share of the leUSD staking vault                                          | Earn a share of protocol revenue                                                                                      |
| $LENDS           | The project's ecosystem token                                               | Gain exposure to a share of protocol revenue, buybacks and, in the future, staking, governance, and licensing revenue |

## Tokenized Stocks: Borrowing Collateral

Supported tokenized stocks can be deposited into isolated borrowing positions. Their price exposure does not disappear when deposited. If the stock rises, the collateral value rises. If it falls, the position moves closer to liquidation.

Each market has its own borrowing limit, liquidation threshold, debt caps, and availability status. See [Collateral Markets](/borrow-against-tokenized-stocks/collateral-markets.md).

## leUSD: Borrowed or Reserve-Backed Dollars

leUSD enters circulation in two ways:

1. A user borrows it against tokenized-stock collateral.
2. A user deposits USDG into the PSM and receives the same amount of leUSD.

Those two routes create different backing, but the resulting leUSD is the same token. Users can hold it, use it to repay debt, stake it for sleUSD, or request a PSM redemption when eligible liquidity is available.

## USDG: PSM Reserve Asset

USDG deposited into the PSM backs PSM-issued leUSD. 90% of underlying USDG is placed into an external Morpho vault to earn yield while keeping 10% available for immediate redemptions. This ratio is being rebalanced every 30 seconds.

## sleUSD: Revenue-Bearing Staking Shares

When you stake leUSD, you receive sleUSD shares. The number of sleUSD tokens in your wallet does not need to increase for you to earn. Instead, each share can become redeemable for more leUSD as realized revenue enters and vests in the staking vault. See [sleUSD Staking](/earn-with-lends/sleusd-staking.md).

## $LENDS: The Project Token

$LENDS is separate from leUSD and sleUSD. It is not required to borrow, convert through the PSM, or stake leUSD.

The $LENDS token is designed around a 5% buy/sell fee and protocol-revenue buybacks. Future utility is planned to include revenue-sharing staking, governance, and a share of licensing revenue from third-party deployments. See [$LENDS Token](/earn-with-lends/usdlends-token.md).

## What Earns—and What Does Not

| Position                                | Earns protocol revenue?                                     |
| --------------------------------------- | ----------------------------------------------------------- |
| Tokenized stock deposited as collateral | The position keeps the tokenized stock's own price exposure |
| Unstaked leUSD                          | No automatic protocol yield                                 |
| sleUSD                                  | Yes, variable realized revenue through the share value      |


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