> For the complete documentation index, see [llms.txt](https://docs.spacefi.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.spacefi.io/products/trading/liquidity-pool.md).

# Liquidity Pool

When you add tokens to the liquidity pool, you will earn liquidity pool (LP) tokens and share fee revenue.

 

### **LP Token**

For example, if you deposit EVMOS and USDC into the liquidity pool, you will receive EVMOS-USDC LP tokens.

The number of LP tokens you receive represents your share of the EVMOS-USDC liquidity pool. You can also redeem funds at any time by removing liquidity funds.

![](https://4154931239-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FYUVkW8OTAHTSeCoHWpR8%2Fuploads%2Fuw1s4jOUKiHsDV7IqUIo%2F5.png?alt=media\&token=4b1dc00c-1c8b-43a0-b9da-94c210320c74)

 

Liquidity providers earn transaction fees

When someone trades with your liquidity pool, you will earn a corresponding fee as a reward. The trader will pay a fee of 0.3%, of which 0.15% will be added to the liquidity pool of the pair they are trading.

For instance:

● 10 LP tokens represent 10 STAR and 10 USDT tokens

● 1 LP token = 1 STAR + 1 USDT

● Someone trades 10 STAR for 10 USDT

● Other people trade 10 STAR for 10 USDT

● STAR/USDT liquidity pool now has 10.015 STAR and 10.015 USDT

● Each LP token is now worth 1.00015 STAR + 1.00015 USDT

 

To get even more value out of being a liquidity provider, you can also put LP tokens into the Farm to earn more revenue while still receiving the 0.15% transaction fee bonus.

 

### **Impermanent Loss**

Providing liquidity is not without risk, as you may be exposed to impermanent losses.