Liquidity provider
A participant who supplies assets for a protocol’s trading, lending or other liquidity needs.
In more detail
Liquidity providers make the assets available that others use, and may earn fees, interest or incentives in return. The exact arrangement matters: a trading position can change its asset mix, while a lending deposit has different risks and withdrawal conditions. The displayed reward isn't the whole story of what happens to the position.
How you might use it
You earn part of a pool’s trading fees as an LP, then compare the position’s value with simply holding the original tokens.
- Short name
- LP
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