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Anyone can become a liquidity provider on DerpDEX by depositing an equal value of two tokens into a liquidity pool. By doing so, they earn a share of the trading fees generated by the pool. Liquidity providers play a crucial role in maintaining the efficiency and liquidity of the platform.
Currently, DerpDEX provides concentrated liquidity which can help Liquidity Providers to maximise the profitable on their assets. It allows liquidity providers to concentrate their funds within specific price ranges. This approach enhances capital efficiency and reduces the need for excessive capital allocation across the entire price spectrum.