> For the complete documentation index, see [llms.txt](https://docs.parcl.co/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.parcl.co/v2-archive/provide-liquidity.md). # Provide Liquidity Liquidity Providers add liquidity in collateral (currently USDC) to get exposure to net trader profit and loss, trading fees, and skew impact fees. LPs remove liquidity by redeeming and burning their liquidity tokens. Trading fees are reinvested in the pool and auto compound. Since LPs’ liquidity token holdings represent pro rata ownership of a pool, they realize gains and losses by redeeming part or all of their liquidity tokens. LPs take on impermanent loss risk that their funds might be used to pay out positive trader PnL. However, LPs also take on the reward that traders might have neutral or negative PnL. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.parcl.co/v2-archive/provide-liquidity.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.