Lipids are commonly known as fatty acids along with their derivatives, but they also include bile acids, terpenes, steroids, and carotenoids. The three main functions of lipids are forming the membranes around our body’s cells, acting as hormones and vitamins, and energy storage. One example of a lipid is butter. When humans consume butter, we add fat. This substance, the fat, stores and holds energy, like an insulator. These lipids must be stored in particular ways because they are not soluble in water.