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

# Liquidity Pools

ONI.exchange pools allow you to provide liquidity by adding your tokens to liquidity pools.

When you add your token to a liquidity pool you will receive Liquidity Pool (LP) tokens.

\
As an example, if you deposited **ONI** and **BNB** into a liquidity pool, you would receive **ONI-BNB LP** tokens. 

The number of LP tokens you receive represents your portion of the ONI-BNB liquidity pool. 

You can also redeem your funds at any time by removing your liquidity.

![](https://2839958906-files.gitbook.io/~/files/v0/b/gitbook-legacy-files/o/assets%2F-MXcYU6FBabnalBsKA1q%2F-MYf9vFWcduu6HhfGVRx%2F-MYfCo62RBYMEBmXND1P%2Fbinance1.jpg?alt=media\&token=6aa15bd3-5aed-45b5-a654-fe82c4e32aff)

Providing liquidity is not without risk, as you may be exposed to impermanent loss.\
[“Simply put, impermanent loss is the difference between holding tokens in an AMM and holding them in your wallet.” - Nate Hindman](https://blog.bancor.network/beginners-guide-to-getting-rekt-by-impermanent-loss-7c9510cb2f22)

It’s not all bad for liquidity providers as you will also be given a reward in the form of trading fees. Whenever someone trades on ONI.exchange, the trader pays a 0.2% fee, of which 0.17% is added to the liquidity pool of the swap pair they traded on. 

For example:

* There are 10 LP tokens representing 10 ONI and 10 BNB tokens.
* 1 LP token = 1 ONI + 1 BNB
* Someone trades 10 ONI for 10 BNB.
* Someone else trades 10 BNB for 10 ONI.
* The ONI/BNB liquidity pool now has 10.017 ONI and 10.017 BNB.
* Each LP token is now worth 1.00017 ONI + 1.00017 BNB.

To make being a liquidity provider even more worth your while, you can also put your LP tokens to work whipping up some fresh yield on the ONI farms, while still earning your 0.17% trading fee reward.