1. Why be an LP? What's the risk and reward?

This piece is written by @Edyta from Phezzan Discord server

Liquidity providers send various assets that they own to liquidity pools. They bring liquidity to the protocol.


  1. Receiving fees from trades that occurs in the pools they contribute;

  2. In some exchanges, LP can receive protocol native tokens;

  3. In some exchanges, LP can receive LP tokens which they can stake if they want and get extra yield.


  1. Can be exposed on impermanent loss;

  2. Protocol might be hacked and assets can be stolen.

  3. Can get liquidated (partially or completely).

Last updated