# Depositing By depositing your favored listed assets, you will be able to receive lTokens (liquidity Tokens) and earn lending fee income. lToken is a deposit certificate of an underlying asset that accrues interests from being borrowed on Palmy Finance. lToken is redeemable at any time at a 1-to-1 rate with the underlying asset on Palmy Finance as long as there is liquidity available. ### Rewards for Depositors #### Reward 1: The Interest Rate on Loans An interest rate paid by a borrower of an asset is distributed to depositors. The interest rate of an asset is calculated by the utilization rate *U*. > $$U \hspace{1mm} = \hspace{1mm} Total Borrows \hspace{2mm} / \hspace{2mm}Total Liquidity$$ As U gets closer to 100%, depositors run the risk of not being able to withdraw their assets, which leads to a higher interest rate. For instance, when an asset is scarce, it requires high-interest rates for repayments of loans and additional deposits. #### Reward 2: Flash Loan Fees Palmy Finance returns 0.09% of the volume used in Flash Loan to depositors. [Flash Loan](/palmy-finance/function/flash-loan.md) is an advanced feature for developers. There is no specific page for this feature for a user on Palmy Finance. It allows developers to borrow an asset without collateral, as long as the borrowed amount and a fee are returned before the end of the transaction. There is no real-world analogy to Flash Loan. Understanding this requires some basic knowledge about state management in blockchains. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.palmy.finance/palmy-finance/function/depositing.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.