> For the complete documentation index, see [llms.txt](https://docs.pinjamlabs.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.pinjamlabs.com/pinjam-ecosystem-tokens/token-utility.md).

# Token Utility

<figure><img src="/files/KRlTq8RB88Z38BcwmSJO" alt=""><figcaption></figcaption></figure>

Pinjam will be distributing all of the revenue generated directly to users who stake. Both lenders and borrowers receive $TOKEN rewards to incentivize protocol use - but with different distributions over time.

The tokens will be vested for 3 months but may be claimed immediately for a 50% penalty. The penalty is then distributed to users who choose to lock for 3 months. This mechanism ensures steady rewards for those who actively commit to the protocol by locking their tokens.

1. If you're a staker, you receive protocol fees.
2. If you're a locker, you receive protocol fees - AND exit penalties from users who exit their vests early.

Additionally, when users lend on Pinjam, the Pinjam protocol will lend out **unborrowed** funds to other ecosystem projects which will generate yield, resulting in higher yields for lenders and stakers.