# Liquidity Provider (Long Farmer)

Liquidity providers will provide equal amounts of nAssets and $USDC to liquidity pools on Nasdex. In return they will receive LP tokens representing their share of assets in the respective liquidity pool.&#x20;

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Providing liquidity on a tokenized stock gives you a long position in that stock on 50% of your capital. This is a much less volatile position as compared to opening a long position with 100% of your capital. Such a position might be less beneficial on the upside, but it also covers your losses on the downside.\
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Providing liquidity is subject to impermanent loss, which is the loss occurred when the price ratio of the 2 assets in the liquidity pool diverge.\
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Price of asset A goes up 2x against asset B = 5.74% Impermanent loss\
Price of asset A goes up 4x against asset B = 20% Impermanent loss\
Price of asset A goes down 50% against asset B = 5.72% Impermanent loss\
Price of asset A goes down 75% against asset B = 20% Impermanent loss\
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To experiment with more scenarios when the prices of both assets in the liquidity pool diverge refer to this calculator created by dailydefi\
[https://dailydefi.org/tools/impermanent-loss-calculator/\
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](https://dailydefi.org/tools/impermanent-loss-calculator/)Providing liquidity has its benefits as well, liquidity providers earn a swap fee, whenever a trader trades against the pool they provided liquidity on. In addition, liquidity providers will also earn $NSDX tokens through the $NSDX liquidity mining programme, when they stake their LP tokens on NASDEX.
