> For the complete documentation index, see [llms.txt](https://docs.lif3.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.lif3.com/terrace/lending-pools/borrowing.md).

# Borrowing

Borrowers can add LP tokens to the Collateral contract as collateral. If there is enough liquidity in both Borrowable contracts to form the loan, a borrower can use this collateral to create a loan that needs a specific number of the underlying tokens. The Lif3 Protocol uses tokens from Borrowable0 and Borrowable1 to add liquidity to the DEX for the token pair to enable leveraged yield farming.

<figure><img src="/files/8EY1aooTAazb6F6ImTiD" alt=""><figcaption></figcaption></figure>

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