> For the complete documentation index, see [llms.txt](https://lenen-protocol.gitbook.io/lenen-protocol/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://lenen-protocol.gitbook.io/lenen-protocol/proper-indicator/reserves.md).

# Reserves

**Reserves are balances of underlying assets, stored internally within the protocol, which automatically protect users from bad debts. Reserves can also be withdrawn or used through the governance process.** 

**The reserve fund is generated in two ways: the difference between the interest paid by the borrower and the interest earned by the underlying asset supplier is included in the agreement as a reserve fund. Second, the liquidation process uses and can increase protocol reserves based on target reserve levels set by governance.**