Decentralized exchanges (DEX) like Uniswap, SushiSwap, and PancakeSwap offer lucrative opportunities to earn fees by providing liquidity. This article will guide you through the process of becoming a liquidity provider and maximizing your earnings.

What is Liquidity Provision?

Liquidity provision involves depositing pairs of assets into a liquidity pool. These pools facilitate trading on DEX platforms, allowing users to swap between different cryptocurrencies.

Steps to Provide Liquidity:

1. Select a DEX: Choose a platform such as Uniswap, SushiSwap, or PancakeSwap.
2. Add Liquidity: Deposit two assets (e.g., ETH and USDT) into a liquidity pool in a specified ratio.
3. Receive LP Tokens: In exchange for your deposit, you will receive Liquidity Provider (LP) tokens, representing your share in the pool.