
DeFi Education: What is a Liquidity Provider? Fueling DeFi’s Open Markets!
Liquidity Providers (LPs) are the silent engines that power DeFi markets, enabling decentralized exchanges, lending, and yield farming to function without intermediaries. But while LPs can earn trading fees and token rewards, they also expose themselves to risks like impermanent loss and smart contract exploits. In this third part of our FinTelegram DeFi Series, we explain who liquidity providers are, how liquidity pools work, and what dangers hide beneath the surface.