# Lending Market Liquidity Risk The Pawnfi Lending Market is a decentralized, cross-margin market that enables the supplying and borrowing of different tokens from liquidity pools, and earning interest on assets supplied. The liquidity of the market is measured by the availability of assets for basic market operations such as borrowing assets backed by collateral and claiming supplied assets along with accrued yield. It is a key metric, as a lack of liquidity will hinder operations. At any point in time, the liquidity of the market can be assessed through the utilization ratio (i.e., the share of reserve that is currently borrowed versus the supply of each asset) across different tokens. To maximize the liquidity of the protocol and at the same time optimize capital efficiency, interest rate model will serve as an ideal regulator. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.pawnfi.com/risk/risk-framework/lending-market-liquidity-risk.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.