> For the complete documentation index, see [llms.txt](https://lithium-2.gitbook.io/lithium-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://lithium-2.gitbook.io/lithium-docs/lithium-protocol/editor.md).

# Protocol Flow

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1. **Miners Earn Block Rewards**\
   Miners perform Proof-of-Work (PoW) to secure the network and earn block rewards (called "coinbase rewards"). These rewards usually have a waiting period (coinbase maturity) before they can be spent.
2. **Deposit Rewards into a Smart Contract**\
   Instead of waiting for their rewards to mature, miners can deposit them into a **Lithium smart contract**. They choose a lock-up duration (e.g., 2 weeks, 3 months, 6 months, or 12 months) to earn **boosted yields** (up to 25%).
3. **Receive Liquid Mining Tokens (LMTs)**\
   The smart contract issues **LMTs** to the miner. These tokens represent the locked rewards and their maturity value. LMTs are tradable, meaning miners can sell them to others for instant liquidity.
4. **Buy and Sell LMTs on a Marketplace**\
   LMTs are traded in a **decentralized marketplace**. A **Request-for-Quote (RFQ) system** matches buyers (traders) and sellers (miners) based on yield, maturity, and price preferences.
5. **Traders Benefit from LMTs**\
   Traders buy LMTs to earn yields backed by energy (mining). They can hold them until maturity to claim the rewards or use them as collateral in DeFi strategies, unlocking additional financial opportunities.
6. **Rewards Unlock at Maturity**\
   When the lock-up duration ends, the smart contract automatically releases the rewards to the LMT holder. If the LMT was traded, the new owner gets the rewards.