> For the complete documentation index, see [llms.txt](https://docs.native.org/aqua/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.native.org/aqua/introduction/liquidity-providers.md).
# Liquidity Providers
Aqua is a groundbreaking lending and borrowing protocol built on the principles of Compound V2. Within Aqua, liquidity providers enjoy unprecedented autonomy in selecting assets to supply, all while eliminating the risk of impermanent loss through a single asset supply system.
Users benefit from flexible asset utilisation, seamlessly leveraging deposited assets as collateral for borrowing other assets. Aqua's lending, borrowing, and liquidation mechanisms closely resemble those of Compound V2, ensuring a familiar and reliable experience.
A standout feature of Aqua is the additional yield that liquidity providers receive from market makers. By leveraging assets to facilitate swaps, market makers enhance pool utilisation rates, resulting in amplified interest earnings for liquidity providers.
Additionally, Aqua extends support to tokens deemed higher risk or lacking an on-chain oracle. While these tokens remain open for supply, liquidity providers are protected from borrowing or using them as collateral. Nonetheless, market makers can still utilise these assets, generating fees that contribute to liquidity providers' earnings.
In summary, Aqua offers liquidity providers a powerful and innovative platform to tap into their assets and earning potential in the decentralised finance landscape.
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