> ## Documentation Index
> Fetch the complete documentation index at: https://docs.range.fun/llms.txt
> Use this file to discover all available pages before exploring further.

# Liquidity basics

> Understand pools, positions, and the decisions you make as a liquidity provider.

Providing liquidity means supplying assets to a pool that traders use to swap tokens. As a liquidity provider, or **LP**, you earn a share of trading fees.

Liquidity management is the work around that deposit: choosing a pool, setting your exposure, monitoring the position, and deciding when to claim fees or withdraw.

## A pool and a position are different

A **pool** is the market for a token pair. Several pools can exist for the same pair, with different fees or rules.

A **position** is your contribution to one pool. With concentrated liquidity, you choose a price interval for it. You can hold several positions in the same pool or across tokens. See Uniswap's [introduction to concentrated liquidity](https://developers.uniswap.org/docs/get-started/concepts/liquidity-providers/concentrated-liquidity).

## Follow one example

These docs use a fictional token, **EXAMPLE**, paired with a quote token. The **quote token** is the asset used to express EXAMPLE's price. Examples are illustrations, not recommendations.

After depositing, you follow two things: the assets in your position and the fees it earns. A growing fee balance does not mean your position is profitable overall.

```mermaid theme={null}
flowchart TD
    A[Find a pool] --> B[Choose a range]
    B --> C[Create a position]
    C --> D[Track balances and fees]
    D --> E[Claim fees or withdraw]
```

## What you manage

| Decision   | What to consider                                                         |
| ---------- | ------------------------------------------------------------------------ |
| Pool       | Token addresses, reserves, trading activity, fee rules, and any hook.    |
| Range      | Where you supply liquidity and how price movement affects your exposure. |
| Deposit    | Which tokens the position needs and how much to allocate.                |
| Monitoring | Current balances, range status, and unclaimed fees.                      |
| Exit       | The tokens you will receive and the costs of the action.                 |

Continue with [how ranges work](/learn/ranges), then review [risks and tradeoffs](/learn/risks).