# How it works

HeraFinance is designed around a straightforward three-step flow that makes leveraged yield farming accessible to any user, regardless of experience level.

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### Supply

Users deposit supported assets into HeraFinance lending pools. Supplied capital earns stable lending yield generated by borrower interest payments. Lenders maintain full liquidity rights and can withdraw funds at any time, subject to pool utilization. This makes HeraFinance an attractive option even for users who do not wish to take on leverage.
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### Borrow

Farmers connect to HeraFinance's lending pools to borrow additional capital, amplifying the size of their positions beyond what their own funds would allow. The protocol supports leverage of up to 6x, meaning a user with $1,000 of their own capital can control a farming position worth up to $6,000. Borrowing rates are algorithmically determined based on pool utilization, ensuring fair pricing for all participants.
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### Farm

Borrowed capital is deployed alongside the user's own assets into whitelisted liquidity pairs on BNB Chain DEXes. Farming rewards begin accruing immediately. The protocol continuously auto-compounds these rewards back into the position, maximizing the power of compounding without any manual intervention required from the user.
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## Risk Management

HeraFinance monitors all leveraged positions in real time. Each position carries a defined debt ratio threshold. If a position's debt ratio approaches the liquidation boundary — due to price movement or impermanent loss — the protocol flags it for liquidation to protect lenders. Liquidation buffers and gradual position unwinding mechanisms are designed to minimize losses for all parties. Users have full visibility into their position health through the HeraFinance dashboard at all times.


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