# Liquidity provider

## Definition

A liquidity provider is a user or entity that supplies assets to a liquidity pool so a protocol can use those assets for trading, lending or other operations.

## What it means in practice

Depending on the protocol, providers may receive pool tokens, fee claims or other accounting positions representing their share.

## How this concept appears in Terenval Wallet

Terenval can sign compatible liquidity-deposit or withdrawal transactions, but the resulting position belongs to the external DeFi protocol.

**Important:** Understand withdrawal conditions, token approvals and price risk before supplying assets.

**[Install Terenval Wallet](https://wallet.terenval.com/?lang=en)**

## Related terms

- [Liquidity pool](https://wallet.terenval.com/glossary/liquidity-pool/)
- [Automated market maker](https://wallet.terenval.com/glossary/automated-market-maker/)
- [Yield farming](https://wallet.terenval.com/glossary/yield-farming/)
- [DeFi](https://wallet.terenval.com/glossary/defi/)
- [Token approval](https://wallet.terenval.com/glossary/token-approval/)
- [smart contract](https://wallet.terenval.com/glossary/smart-contract/)

## Related Terenval Answers

- [How to Secure a Non-Custodial Crypto Wallet](https://wallet.terenval.com/answers/how-to-secure-non-custodial-crypto-wallet/)
- [How to Send Crypto Safely Between Wallets](https://wallet.terenval.com/answers/how-to-send-crypto-safely-between-wallets/)
- [Can One Crypto Wallet Manage Multiple Blockchains?](https://wallet.terenval.com/answers/can-one-crypto-wallet-manage-multiple-blockchains/)

## Sources

- https://ethereum.org/en/defi/
- https://docs.walletconnect.network/
- https://wallet.terenval.com/info/security/

Official page: https://wallet.terenval.com/glossary/liquidity-provider/