LP Providers and Liquidity in DeFi A quick guide + RUBT example
Disclaimer: this material is for educational purposes only and is not financial advice. DeFi returns are not guaranteed and involve risk.
What is liquidity
Liquidity is the availability of funds in a market at any moment so assets can be bought or sold without sharp price swings.
On decentralized exchanges (DEXs), liquidity is provided by LPs (liquidity providers) — users who deposit their assets into trading pools.
DEXs operate using automated formulas: traders swap against a pool, not directly with another person. Every swap generates a fee that is distributed among LPs.
Simply put, you help the market function and earn a share of trading fees.
Important: LP income depends on trading volume and price movement. Strong volatility can affect overall results.
Practical example
Imagine a RUBT token with a RUBT/USDT liquidity pool on Uniswap v4.
LPs deposit equal value of RUBT and USDT into the pool. After that, anyone can instantly swap between the two assets.
buy RUBT → tokens leave the pool
sell RUBT → tokens return to the pool
Each operation generates fees that are automatically distributed to LPs proportionally to their share.
Higher trading activity means higher potential earnings.
The core idea is simple: liquidity is market fuel. It makes swaps fast, predictable, and efficient, while LPs earn rewards for supporting infrastructure.
Part 2. How to provide liquidity on Uniswap
General flow:
- Go to https://app.uniswap.org/ and connect your wallet.
2) Open the Pools section:
Here you’ll see all available liquidity pools.
3) Choose a trading pair.
The RUBT/USDT pool will launch later — for now you can use ETH/USDT as an example.
Click Add Liquidity.
4) Configure your position.
The token pair loads automatically, but you can change it.
Select a fee tier (differences are shown in the interface).
5) Choose a price range.
Full range
Simple participation across all prices, but with potentially higher impermanent loss.
Custom range
Lets you concentrate liquidity in a chosen zone for better capital efficiency and fees, but requires active management.
6) Enter asset amounts.
Pools require equal value deposits.
Example: adding 1 ETH means also depositing the equivalent value in USDT at market price.
With range strategies, asset ratios may shift.
Confirm the transaction.
Done
You are now an LP and begin earning trading fees while your funds remain in the pool.
You will also receive Tetris Points for the time your liquidity stays in the RUBT/USDT pool.
The longer the position is active, the more points you earn. In the future, these points can be redeemed for the Tetris token.
If you want to be among the first to know when the RUBT/USDT pool goes live, follow our X for more updates: https://x.com/Tetris_Money