A quick look into liquidity providers

Ethereum and its smart contracts have led to rethinking of what finance should look like. For example, the vast majority of popular DeFi protocols use pools as a liquidity source. Smart contracts allow anyone to become a liquidity provider (LP) on a decentralized exchange or a lender on a lending protocol by adding their assets to pools.

These pool use resulted in the number of locked assets in lending and DEXs reaching $36B (82% of all assets in DeFi). Of course, Total Value Locked (TVL) growth in these sectors is associated with The Summer of DeFi and the widespread use of liquidity mining incentives.