# Frequently Asked Questions

## What is Rhombus Protocol?

Rhombus Protocol is a decentralized, non-custodial liquidity market platform where users can participate as suppliers or borrowers. Suppliers provide liquidity to the market and earn passive income, while borrowers can access liquidity in both over-collateralized (ongoing) and under-collateralized (flash loans within a single transaction) formats.

To engage with the community and seek assistance, you can join the [Rhombus Protocol Telegram](https://t.me/rhombus_io). Our team and community members are available to help you understand and effectively use the platform.

### Why Choose Rhombus Protocol?

Rhombus Protocol offers a secure and transparent environment for liquidity markets. As a clean fork of Aave protocol, of which the contract codes have undergone extensive audits and Rhombus Protocol is built with robust security measures to ensure the safety of users' assets. It is fully open-source, allowing anyone to interact with the protocol through a user interface client, API, or directly with smart contracts on the blockchain. The open-source nature enables the development of third-party services and applications to interact with the protocol and expand its ecosystem.

### How to Interact with Rhombus Protocol?

1. **Supply Assets:**
   * Select your preferred asset and the amount you wish to supply. By supplying assets to the protocol, you earn passive income based on market demand for borrowing.
2. **Earn Passive Income:**
   * Interest is accrued based on the borrowing demand for the supplied assets. The more demand there is for an asset, the higher the interest rate you earn.
3. **Use Supplied Assets as Collateral:**
   * Once you have supplied assets, you can use them as collateral to borrow other assets. This allows you to leverage your existing holdings to access additional liquidity.
4. **Offset Borrowing Costs:**
   * Any interest earned from supplying funds helps to offset the interest accrued on borrowed funds, making the process of borrowing more cost-effective.

### Costs of Using Rhombus Protocol

Interacting with the protocol involves transaction fees, which are required for blockchain operations. These fees vary based on network activity and transaction complexity. Users should be aware of these costs before engaging in supply or borrowing activities.

### Security of Supplied Funds

All supplied funds are held in smart contracts. These contracts are publicly accessible, open-source, and have been formally verified and audited by third-party experts. You can withdraw your funds from the pool on demand or export a tokenized version of your position (rTokens). These rTokens represent your lender position and can be moved and traded like any other cryptographic asset on the blockchain.

### Understanding the Risks

No decentralized platform is entirely risk-free. Rhombus Protocol, like any other DeFi platform, is subject to certain risks:

1. **Smart Contract Risk:**
   * The risk that a bug or vulnerability exists within the protocol’s code. To mitigate this, the code is publicly available, open-source, and has undergone multiple security audits.
2. **Liquidation Risk:**
   * The risk that your collateral may be liquidated if it falls below the required threshold during borrowing. Users should monitor their collateral and borrowing ratios to avoid liquidation.
3. **Ongoing Risk Mitigation:**
   * Rhombus Protocol runs an active bug bounty program and continuously reviews its code to minimize risks.

For more detailed information on risks and security, please refer to the [Risks sections](/security/risks.md) of the documentation.


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