When you deposit a Proton wrapped xToken to a Lending Pool, it becomes an L-Token. For example, XBTC, on Proton Loan becomes LBTC. The quantity of the L-Token represents your share in the lending pool.
To simplify the experience, by default L-tokens are not withdrawable from contracts.
When a cryptocurrency is deposited into your Proton wallet, a wrapping process is initiated via a smart contract. In short, the deposited cryptocurrency becomes an xToken, reference by an "X" in the token name (ie XBTC, XETH etc). xTokens enjoy all of the benefits of the Proton blockchain, including:
- Instantaneous transactions
- No gas fees for end-users
- The ability to process micro-transactions
- Access to Proton Swap
- Easy integration into Proton dApps and projects
Read our blog post on xTokens here.