> For the complete documentation index, see [llms.txt](https://lemma-support.gitbook.io/lemma/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://lemma-support.gitbook.io/lemma/introduction.md).

# Introduction

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Lemma is a decentralized finance (DeFi) protocol with two products: a "leveraged" basis trading vault and USDL, a stablecoin that is fully decentralized, 100% capital efficient and USD pegged.
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## Why use Lemma?

* Our basis trading vault is:
  * [A sustainable source of yield](/lemma/concepts-overview/basis-trading-yield.md#where-does-lemmas-yield-come-from)
  * [Market neutral (USD denominated PnL)](/lemma/concepts-overview/usdl.md#creating-a-market-neutral-position)
  * ["Leveraged" to increase PnL with almost no liquidation risk](/lemma/concepts-overview/basis-trading-vault.md)
* Our USDL stablecoin is:
  * [Fully decentralized](/lemma/smart-contracts/audits.md)
  * [Trustlessly mintable & redeemable for $1 worth of ETH at any time](/lemma/concepts-overview/usdl.md)
  * [USD pegged & very stable](/lemma/concepts-overview/usdl-price-stability.md)

## How does it work at a high level?

1. Users can deposit USDC, USDT, USDL, or ETH on Lemma
2. Lemma takes the USDC and USDT & sells it for ETH
3. Lemma moves the ETH to a decentralized derivatives exchange
4. Lemma uses the ETH as collateral to short itself with no leverage
5. Lemma mints USDL, a USD pegged stablecoin, against this market neutral position
   1. If a user only wanted to mint a stablecoin then USDL is returned
   2. If a user deposited assets into the basis trading vault, then the minted USDL is staked to access the profits and losses from fees generated (via funding rate payments) on the short position described above

![](/files/X987vOsBHPSONoGi7ese)

## Join our Communities

* [Twitter](https://twitter.com/Lemma_Labs)
* [Discord](https://discord.com/invite/bbFtEYhNc9)