> For the complete documentation index, see [llms.txt](https://earn-docs.affinedefi.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://earn-docs.affinedefi.com/strategies.md). # Strategies Strategies are the most atomic unit of investment activity on the Affine protocol. Strategies can be broken into three general categories: ### Token Strategies Token strategies are the most obvious and straightforward stategies. These stategies simply let users buy and hold crypto-assets directly or through [wrapped versions](https://cointelegraph.com/altcoins-for-beginners/a-beginners-guide-to-understanding-wrapped-tokens-and-wrapped-bitcoin#:~:text=Wrapped%20crypto%20tokens%20are%20cryptocurrencies,to%20transact%20on%20other%20platforms.) of these assets. For instance, users could buy Bitcoin, Ethereum, MATIC -- or their wrapped versions -- and more. Taken together, baskets that contain token strategies allow users to hold (long position) and gain price exposure to the underlying assets. There can also be short positions as well. ### Lending Strategies Lending strategies are slightly more complex and allow users to participate in some of the true innovations in the DeFi ecosystem. These stategies allow users to provide funds like USDC to protocols such as Aave and Compound which are then lent out via said protocols. You can learn more about DeFi lending protocols [here](https://defiprime.com/decentralized-lending). ### **Liquidity Providing Strategies** While related to lending strategies, liquidity pool strategies are slightly distinct in that you are providing liquidity to support a market. Typically, you do this by providing 2-sided liquidity so that market participants can exchange two tokens. Take, for instance a pool of MATIC and USDC: In this example, you would provide both MATIC and USDC into the pool. By providing this capital in the form of those two assets, you earn a portion of the fees that are earned when swapping those two assets. You can learn more about how liquidity pools work in detail [here](https://www.coindesk.com/learn/what-are-liquidity-pools/) and [here](https://appinventiv.com/blog/how-defi-lending-works/). --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://earn-docs.affinedefi.com/strategies.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.