LP (Liquidity Providing)

LP (Liquidity Providing) is the process of providing liquidity to a Uniswap pool. A user deposits both tokens in the pair (8LNDS and USDC) in equal USD values and receives a share of the pool's trading fees (0.3% of every trade on Uniswap V2) proportional to their contribution. Liquidity can be withdrawn at any time, together with any fees earned. The main risk is impermanent loss.