# Borrow & Lending

## pTokens

### How do pTokens earn interest?

Each market has its own Supply interest rate (APR). Interest isn't distributed; instead, simply by holding pTokens, you'll earn interest.

pTokens accumulates interest through their exchange rate — over time, each pToken becomes convertible into an increasing amount of it's underlying asset, even while the number of pTokens in your wallet stays the same.

### Do I need to calculate the pToken exchange rate?

When a market is launched, the pToken exchange rate (how much ETH one pETH is worth) begins at 0.020000 — and increases at a rate equal to the compounding market interest rate. For example, after one year, the exchange rate might equal 0.021591.

Each user has the same pToken exchange rate; there’s nothing unique to your wallet that you have to worry about.

### Can you walk me through an example?

Let’s say you supply 1,000 DAI to the Paribus Protocol, when the exchange rate is 0.020070; you would receive 49,825.61 pDAI (1,000/0.020070).

A few months later, you decide it’s time to withdraw your DAI from the protocol; the exchange rate is now 0.021591:

*  Your 49,825.61 pDAI is now equal to 1,075.78 DAI (49,825.61 \* 0.021591)
*  You could withdraw 1,075.78 DAI, which would redeem all 49,825.61 pDAI
*  Or, you could withdraw a portion, such as your original 1,000 DAI, which would redeem 46,315.59 pDAI (keeping 3,510.01 pDAI in your wallet)

### How do I view my pTokens?

Each pToken is visible on Arbiscan, and you should be able to view them in the list of tokens associated with your address.

You can find a list of all pTokens under the [network list](https://docs.paribus.io/for-developers/getting-started#networks).

### Can I transfer pTokens?

Yes, but exercise caution! By transferring pTokens, you’re transferring your balance of the underlying asset inside the Paribus Protocol. If you send a pToken to your friend, your balance (viewable in the [Paribus Interface](https://app.paribus.io/)) will decline, and your friend will see their balance increase.

A pToken transfer will fail if the account has [entered](https://docs.paribus.io/for-developers/comptroller#enter-markets) that pToken market and the transfer would have put the account into a state of negative [liquidity](https://docs.paribus.io/for-developers/comptroller#get-account-liquidity).