# How a Self-Lending Position is Created

The self-lending lifecycle operates entirely within a single atomic transaction and interacts with multiple Peapods primitives (Pods, LVF Lending Vaults, and incentivised LP Pools):

1. **Flashloan Paired Asset**\
   The user initiates a flashloan for the required paired asset (e.g., ETH or USDC). This mimics external capital and will be used to fund the lending pool momentarily.
2. **Supply to LVF Lending Pool**\
   The flashloaned paired asset is deposited into the LVF lending pool associated with the target Pod. This mints a receipt token (e.g., ERC-4626 shares) representing their temporary supplier position.
3. **Wrap Base Token and Form LP**\
   Simultaneously, the user wraps the base token (TKN) into pTKN and combines it with the receipt token to form a pTKN/Paired Asset LP. This LP is created using the incentivised AMM.
4. **Use LP as Collateral**\
   The LP token is deposited into the LVF vault and registered as collateral for a new borrowing position.
5. **Borrow Back Paired Asset**\
   The user borrows the same quantity of the paired asset that was initially flashloaned, using their LP as collateral.
6. **Repay Flashloan**\
   The borrowed paired asset is used to repay the flashloan, completing the cycle.

At the end of this transaction: - The user has created a valid LP-backed LVF position - The LVF lending pool is 100% utilized - No external supplier was needed - The interest rate curve is active and visible

This design establishes demand-driven liquidity from zero and exposes the position to real yield accrual immediately.

<figure><img src="/files/0Fb3tnCaVGzkfO8T0sQ9" alt=""><figcaption></figcaption></figure>

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