# Indirect Liquidity Providing

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Crypto holders looking to generate simple passive income can deposit crypto assets in their **Securd Savings Account** and become Indirect Liquidity Providers.
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These deposits, grouped by asset in **Lending Pools**, are used to grant loans to Liquidity Providers. The loan interest paid by Liquidity Providers (Borrowers) generates revenues in the Depositors' Savings Balance.

Like most lending protocols, **Securd** protects deposits from repayment defaults by requiring Borrowers to lock assets in the Collateral Pool. The key difference is that **Securd** uses a very efficient collateral: LP Tokens. These LP Tokens represent the Borrower share of a DEX liquidity pool and can be redeem for a certain quantity of the original tokens.

**In order to cover for repayment at any point in time, the ratio between the collateral value and the related loans value, called Collateral Factor or CF, should be maintained above a certain value,** called **Liquidation Threshold** or LT (defined by the Collateral Model and always above 100%).

If the Collateral Factor reaches the Liquidation Threshold, **Securd** will seize the Borrower's collateral and sell it to a Liquidator. The sale proceeds will be used to pay back the related loans. This liquidation mechanism offers a strong capital protection to Depositors.

<figure><img src="/files/qjYn6WM3UtblJin37UAk" alt=""><figcaption></figcaption></figure>


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