# Mechanism Overview

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WEN Protocol combines LSD and Liquity, and supports a variety of LSD asset combinations based on the Liquity protocol.&#x20;

Here is a brief introduction how Wen Protocol works:

1. **Deposit** - Users can deposit their pufETH into Wen protocol, they can either choose a strategy or approve their assets to a vault contract. The assets will go into different puffer protocol and start earning interests, and WEN protocol takes **no fee**.
2. **Mint** - Users can mint the native stablecoin `wenUSD` against their assets used as collateral by opening a Trove, where **incentivized** by `esWEN`.
3. **Redeem** - Redeem`1 wenUSD` for `$1` worth of pufETH when `wenUSD` pegging falls below `$1` at any time.
4. **Liquidate** - Secure Wen Protocol by providing `wenUSD` to the Stability Pool in exchange for **rewards** paid as liquidation fee and `esWEN`.
5. **Earn** - Providing liquidity for `$WEN/ETH` and `wenUSD/USDC` LP pool to **earn** **reward** paid in `esWEN, CRV, CVX` and transaction fees.
6. **Stake** - Stake esWEN to **earn** the protocol fees such as minting fee, redemption fee and annual fee,  earn esWEN and govern the system.
7. **Lock** - Buy and Lock `WEN` from the market, convert it into `esWEN` to earn protocol incomes and governance the system.
8. **Unlock** - Unlock esWEN and convert it to WEN at anytime through a cliff-linear-vesting process.
9. **Governance** - Vote on WEN Improvement Proposals to decide the future of WEN protocol.