CRYPTO GLOSSARY

Liquidity provider

Someone who deposits both tokens into a pool and earns a share of the swap fees.

Liquidity provider in more detail

People called liquidity providers deposit both tokens, in equal value. In return they receive pool tokens that record their share. They can withdraw their share at any time.

Every swap pays a fee that is added to the pool. In the original Uniswap design the fee is 0.30% of each trade, and it belongs to the liquidity providers. Other pools charge different rates.

FROM LESSON 42 · 5 MIN READDEXs and liquidity pools: how swapping worksA decentralised exchange swaps tokens against a pool, not an order book. Learn how a liquidity pool sets its price, what price impact and slippage are, and how to swap without overpaying.Read the lesson

All 128 terms · Checked against the lesson's sources on 10 October 2026.

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