# LP FAQ

1. **What is Nemo LP?**\
   Liquidity Provider (LP): A role that provides liquidity for traders exchanging PT and YT on Nemo, earning income such as transaction fees.
2. **How to provide liquidity?**\
   The liquidity pool consists of yield-bearing assets and PT. You can add liquidity using either the underlying asset or the yield-bearing asset. For example, in the sSUI - PT sSUI pool, you can use either SUI or sSUI. Click [here](/tutorial/liquidity-provider-lp/add-liquidity.md) for details. 
3. **What are the benefits of being an LP?**

* Underlying APY & PT APY: Since the LP is composed of yield-bearing assets and PT, you will benefit from the underlying APY of the yield-bearing assets and the APY of PT.
* Fee: LPs receive transaction fees from swaps.
* Nemo Points: LPs earn Nemo Points.
* Incentives: LPs receive additional incentives from Nemo or other protocols.

4. **What is the specific workflow when adding liquidity?**\
   Taking sSUI as an example: Since the pool consists of PT sSUI and sSUI, when adding liquidity using SUI, Nemo will first convert SUI into sSUI through Scallop. Then, a portion of the sSUI will be swapped/minted into PT, and the remaining sSUI will be paired with it to form the liquidity pair added to the pool.
5. **Why do I receive YT when adding liquidity?**\
   When adding liquidity, a portion of the yield-bearing assets needs to be swapped into PT. If there is insufficient liquidity in the pool and not enough PT is available, the second mode of adding liquidity will be used: the yield-bearing assets are minted into PT and YT, and then the PT is paired with the yield-bearing assets to form the LP.
6. **Why is there no Impermanent Loss (IL) for Nemo LPs?**\
   Since the PT and yield-bearing assets in the LP are backed by the same underlying asset, there is no impermanent loss.
7. **How to remove liquidity?**\
   When removing liquidity, a portion of the PT will be transferred to your portfolio. If the PT has matured, you can directly claim the matured PT. If it has not yet matured, you can either sell the PT in the market or recombine it 1:1 with YT to convert it back into the yield-bearing asset.


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