A liquidity provider (LP) supplies tokens to a liquidity pool, allowing other users to trade against them. In return, the provider earns a share of the trading fees. LPs receive tokens that represent their share of the pool and can redeem them to withdraw their assets. But providing liquidity also carries risk: if the relative prices of the deposited tokens change, the position may be worth less than if the tokens had simply been held. Learn about DeFi or explore Solflare’s trading tools.