# Introduction

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### What is Torches ?

Torches is a decentralized non-custodial liquidity protocol based on KCC, where users, wallets and dapps can participate as depositors or borrowers. Depositors provide liquidity to the market to earn a passive income, while borrowers are able to borrow in an over-collateralised manner.

### Why use Torches ?

Torches utilises common pool-based mechanics where all funds deposited participate in interest-bearing activities equally. Based on KCC, it utilises extremely low fees(\~only few cents per transactio&#x6E;*)* making it highly attractive for both high and low volume deposits and loans.

### How do I use the service?

In order to use the service, you simply supply your preferred assets . After supplying, you will earn passive income based on the market borrowing demand. Depositing assets allows you to borrow other assets by using your deposited assets as a collateral.

Additionally, some tokens(for example, KCS and USDC) are safely staked within the ecosystem to earn additional income for the depositors.

### Where are my deposited funds stored?

Your funds are stored in a system of smart contracts. The code of the smart contract is public and open source. You can withdraw your funds from the pool or export a tokenized (tTokens) version of your lender position.&#x20;

[Learn more about tTokens in the corresponding section](https://docs.torches.finance/docs/protocol/ttokens).

### Is there any risk?

The risks related to the Torches protocol are mainly smart contract risk(risk of bugs within the protocol code) and liquidation risk (risk on the collateral liquidation process).&#x20;


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