Supplying Assets & pTokens
When you deposit into a Peridot market you receive pTokens, a receipt for your share of the pool. You don't earn interest as separate payouts; instead, the receipt itself becomes redeemable for more and more of the underlying asset. This page explains that mechanism, because everything else (APY, withdrawals, collateral) builds on it.
The exchange rate#
Each market tracks one number that ties pTokens to the underlying asset: the exchange rate. On deposit you get amount / exchangeRate pTokens; on withdrawal each pToken pays out at the current rate:
underlying = pTokens × exchangeRate exchangeRate = (cash + totalBorrows − reserves) / totalPTokenSupply
As borrowers pay interest into the pool, totalBorrows grows, so the exchange rate (and with it the value of every pToken) only ever moves up. Your pToken count stays constant while you hold; your claim on the pool grows underneath it.
A worked example#
- You deposit 1,000 USDC when the exchange rate is 1.0200 → you receive ~980.39 pUSDC.
- Over the year, borrower interest lifts the exchange rate to 1.0710.
- Your 980.39 pUSDC now redeem for 980.39 × 1.0710 ≈ 1,050 USDC: a 5% yield, delivered entirely through the rate.
Why a receipt token at all?#
- Continuous interest: accrual happens every block, with no payout schedule and nothing to claim or reinvest.
- Instant, partial withdrawals: redeem any fraction of your pTokens at any time, as long as the pool has liquidity.
- Collateral: the same pTokens double as collateral when you borrow, without interrupting the interest they earn.
What you see in the app
The app never shows pTokens or exchange rates; it shows your balance in the asset you deposited, already converted at the live rate. Expert mode's market details expose the raw numbers for those who want them.Read next#
Interest rates
What moves the exchange rate: the jump rate model, interactively.
Borrowing & collateral
Using your deposit as collateral without giving up its yield.
Common questions
Do I have to claim my interest?
No. Interest accrues into the pToken exchange rate every block, so your balance grows on its own. There is nothing to claim and nothing to reinvest.
Can the pToken exchange rate fall?
In normal operation no: it rises as borrowers pay interest into the pool. It is not a market price, it is a ratio of pool assets to receipts outstanding.
Where do I see my pTokens in the app?
You normally do not. The app shows your balance in the asset you deposited, already converted at the live rate. Expert mode's market details expose the raw figures.
Does my collateral keep earning interest?
Yes. pTokens pledged as collateral continue to accrue supply interest, which partially offsets what you pay on the loan.
Last reviewed on .