# Borrower LP Positions

The Borrower LP Position enables you to earn fees in exchange for borrowing from the Lending protocol. This position is seen as a Liability or Short position for which you must post adequate collateral. At the same rate, this enables you to earn interest-like income on otherwise latent assets. 

### Trade Mechanics

The position works along a similar concept as Uniswap's concentrated liquidity. That is, you select a Principal or Trade Amount, and a desired lower + upper range (i.e. tick values) for which that Principal Amount will be switched into or out of Borrowing positions. 

{% hint style="info" %}
Note that the Positions size or Notional Amount will be different from the amount of collateral posted. That is, a $100 position may require that you have $133 (or more) collateral placed in this account. Please ensure you have enough collateral to avoid liquidations.
{% endhint %}

For example, let's assume:

* Notional Amount: $100
* Collateral Requirements: $133 
* Reference Rate: 4%
* Range: 1-4% (where the upper bound = the current Ref Rate)

If the Reference Rate moves within the range of 1-4%, then the Borrower LP will receive a share of protocol fees in proportion to the total Borrower LP positions within that range. 

### Unwinding Positions

At any time, the underlying position for the Borrower LP position (using the example above) is one of:

* Ref Rate > 4%:  0% Borrowing 
* Ref Rate < 1%:  100% Borrowing
* 1% < Ref Rate < 4%: 0% to 100% of Principal is Lent Out

When you unwind your position, you will receive one of the above three depending on the underlying position. Your position will not 'reset' to the original $0 borrowing cash position unless the Ref Rate is above your upper bound, or you have performed additional steps to unwind the underlying positions.

{% hint style="info" %}
Be sure to Read our primer on Borrower LP Position Risks (coming soon)
{% endhint %}


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