# Net Interest Implications (LVF)

All LVF borrowing on Peapods follows a standardized interest distribution model:

* **90%** of interest paid by borrowers is allocated to lenders (pro-rata)
* **10%** is retained by the protocol as non-emissive revenue

In self-lending configurations, a borrower may also act as a supplier to the lending pool by using a flashloan-enabled loop. This entitles them to reclaim a proportional share of the lender-side interest distribution, effectively reducing their **net cost of capital**.

This structure introduces a unique APR spread whereby external lenders receive the full gross yield, while self-lending borrowers pay significantly less without affecting protocol revenue or requiring emissions.

This asymmetric structure introduces a number of implications which enable Peapods to uniquely provide a scenario in which both lenders and borrowers incentives are aligned, allowing both parties benefit together without subsidies or emissions.

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