Liquidity Providers

In the PRMM model, liquidity providers (LPs) are temporary trading counterparts, adjusting positions passively in the opposite direction to users during trades or liquidation, maintaining the same scale.

LPs earn from four sources: INF liquidity rewards, trading fees, funding fees from passive positions, and potential gains or losses from these positions.

INF rewards are settled daily and grow with the duration and amount of liquidity provided. Trading fees are first used for offsets. See the Trading Fee Distribution section for more.

LPs risk net open positions and liquidation from leveraging liquidity. Sensible leverage and hedging are advised to mitigate these risks.