Bitcoin
Bitcoin
BTC
$103,056.00
1d: -0.44%
7d: -0.59%
$103,056.00
-0.44%
Ethereum
Ethereum
ETH
$2,471.45
1d: -3.22%
7d: -2.45%
$2,471.45
-3.22%
Polkadot
Polkadot
DOT
$4.59
1d: -3.90%
7d: -10.38%
$4.59
-3.90%
Solana
Solana
SOL
$165.26
1d: -1.58%
7d: -4.98%
$165.26
-1.58%
XRP
XRP
XRP
$2.35
1d: -1.95%
7d: -3.58%
$2.35
-1.95%
Shiba Inu
Shiba Inu
SHIB
$0.00001411
1d: -3.67%
7d: -12.98%
$0.00001411
-3.67%

Liquidity Provider (LP)

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Table of contents
    1. 0.2. How It Works
    2. 0.4. Role in DeFi

A Liquidity Provider (LP) is a user or entity that contributes assets to a liquidity pool, enabling decentralized exchanges to facilitate seamless trading.

How It Works

LPs add tokens to liquidity pools and, in return, earn a portion of the transaction fees generated from trades within the pool. The more tokens an LP provides, the larger their share of the rewards.

Role in DeFi

LPs are essential for maintaining the liquidity and functionality of decentralized finance (DeFi) platforms, helping ensure that trades can be executed quickly without price fluctuations.