# pLP Overview

### Prime Liquidity Provider (pLP) <a href="#id-42a6" id="id-42a6"></a>

* **What is it?**

Liquidity pools are fundamental to many DeFi protocols, enabling users to contribute liquidity in the form of paired assets (such as PRFI & HYPE) in exchange for a share of the pool’s potential yield. pLP tokens can be locked through the protocol to activate PRFI emissions in the money market, and receive protocol revenue.

#### How it works?

Example 1: Depositing $100,000 USDT without any locked pLP tokens earns you the basic APY but doesn't qualify for additional PRFI emissions.

Example 2: Deposit $10,000 USDT and lock $500 in pLP tokens to meet the 5% threshold, making you eligible for PRFI emissions.

The requirement to lock liquidity tokens in pLP form benefits the PrimeFi money market in several ways:

1. Long-Term Participation: Locking pLP tokens commits users to a specific period, increasing the likelihood of them maintaining their deposited collateral.
2. PRFI Emissions Activation: This commitment enables PRFI emissions, rewarding those invested in the protocol's long-term vision.
3. Attracting New Users: These dynamics enhance the PrimeFi money market's appeal to potential liquidity providers, fostering growth and development.

This strategic cycle not only sustains long-term liquidity but also attracts new inflows, creating a mutually beneficial scenario for individual users and the protocol as a whole.

<figure><img src="https://4217557780-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fo4SISzko0XTUUE5cJyPX%2Fuploads%2FMoFlHkmRPEYmyCUJD3dB%2Fimage.png?alt=media&#x26;token=11366be5-e003-41ba-8b9a-b6e89137ae71" alt=""><figcaption></figcaption></figure>

Below, you can see **natural market rates** highlighted in red, and **PRFI emissions** directly underneath, in blue/purple. Users that simply deposit but don't add value to the protocol will continue to earn natural market rates, but will not be eligible for PRFI emissions.

<figure><img src="https://4217557780-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fo4SISzko0XTUUE5cJyPX%2Fuploads%2Fgit-blob-928e5c4361a8a6eb063d4ac07331a67c7b693343%2Fimage.png?alt=media" alt=""><figcaption></figcaption></figure>

{% hint style="info" %}
In order to initiate PRFI emissions for both deposits and loans, you must lock a minimum of 5% of your deposit's USD value in pLP tokens.
{% endhint %}