Key considerations relating to liquidity provisioning include:

• Earn Passive Income: LPs earn a portion of trading fees generated by swaps in the pool.
• Impermanent Loss Risk: Occurs when the price of deposited assets changes compared to when they were first added to the pool.
• Smart Contract Risk: Although major DEXs like Uniswap are considered secure, they still have inherent smart contract risks.

To learn more about liquidity provisioning, explore our sections on:

• Liquidity Provisioning Overview
• How Liquidity Provisioning Works
• Why Provide Liquidity?
• Liquidity Provisioning Key Terms
• Liquidity Provisioning Key Platforms