# Paradigm Liquidity Pool

## Liquidity Pools

To solve the problem of illiquid markets we incentivize users themselves to provide crypto liquidity for a share of trading fees.

### **How it works?**

When you add liquidity, you will receive pool tokens representing your position. These tokens automatically earn fees proportional to your share of the pool, and can be redeemed at any time.

<figure><img src="/files/BvzfsjVyy1f7D5XDgnMR" alt=""><figcaption></figcaption></figure>

When a liquidity pool has a lot of liquidity, trading can happen inside the pool. This means that many users can make use of the DEX to swap out Love or whatever other pairs are available. And when trading happens, fees are generated and the fees will be given to the pool token owners. Giving you profit for making the trade possible and also giving you profit for keeping the pool token alive.


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