> For the complete documentation index, see [llms.txt](https://docs.arenas.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.arenas.fi/atomica/financing-markets/supply.md).

# Supply

Supplying is how **Liquidity Providers** fund a Financing Market. You deposit the market’s asset token (e.g. USDC) into a **pool** and receive **pool shares** that grow in value as borrowers pay interest back into the pool.

***

### How it works

1. **Approve** the asset token for the pool’s financing adapter.
2. **Deposit** the asset into the pool. Your deposit becomes available to borrowers as **intents** (see [Intents & Liquidity](/atomica/intents-and-liquidity.md)).
3. The pool **mints pool shares** to you, representing your claim on the pool’s assets plus accrued yield.

```mermaid
sequenceDiagram
    participant LP as Liquidity Provider
    participant Adapter as Financing adapter (pool)
    participant Pool as Financing pool

    LP ->> Adapter: 1. Approve asset token
    LP ->> Adapter: 2. Deposit assets (ERC-20)
    Adapter -->> Pool: 3. Supply liquidity (becomes intents)
    Pool -->> LP: 4. Mint pool shares
```

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### What you earn

Your pool shares accrue value from:

* **Interest** borrowers pay on active financings.
* Optional **upfront incentives** borrowers pay to attract capital.
* Optional **reward programs** funded by the market or third parties.

There is no fixed APY — returns track the actual performance of the market’s loans.

***

### Things to know

* **Capacity caps.** A pool may have a deposit **cap**; when reached, deposits are paused until capacity frees up. `cap = 0` means unlimited.
* **Pool phases.** Some pools only accept deposits in certain phases (e.g. an accumulation window). Deposits revert when the current phase disallows them.
* **Credit risk.** Pool share value can fall if borrowers default — supplying is not risk-free. See [Atomica Risks](/atomica/atomica-risks.md).
* **Withdrawals are delayed.** Redeeming is a two-step, time-locked process — see [Withdraw](/atomica/financing-markets/withdraw.md).