> For the complete documentation index, see [llms.txt](https://nitro-finance.gitbook.io/ftl/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://nitro-finance.gitbook.io/ftl/core-interactions/lending-or-liquidity-provisioning.md).
# Lending or Liquidity Provisioning
By participating in the liquidity pool as a liquidity provider (LP), users receive a substantial share of the fees generated from DEX and Money Market interactions.
## The Liquidity Structures of Fused Trade Ledger
The Fused Trade Ledger provides a flexible framework, allowing LPs to act as:
* **Liquidity Providers** in a Decentralized Exchange (DEX).
* **Lenders** in a Money Market.
As market prices shift, liquidity positions naturally adjust between the following states:
* **Active Liquidity**: Supports trades in the current price bin, earning **swap fees**.
* **Inactive Liquidity**: Becomes accessible to borrowers, generating **borrowing fees**.
This dynamic system ensures LPs consistently earn fees regardless of market conditions or liquidity state.
### **Spot Concentrated Structure**
Liquidity is fully concentrated in the active bin, supporting trades exclusively at the current market price.
* **Purpose**:
* Maximizes trading fees by focusing liquidity where trading activity is highest.
### **Bid-Ask Structure**
Liquidity is divided across bins above and below the active price, creating two distinct zones:
* **Above the Active Price (Ask)**: Base assets (e.g., NAD) are supplied.
* **Below the Active Price (Bid)**: Quote assets (e.g., USDC) are supplied.
* **Purpose**:
* Balances trading and borrowing fee opportunities.
* Allows LPs to capture returns from both market movements and lending activities.
### **Bell-Curved Structure**
Liquidity is distributed across multiple bins, with larger amounts concentrated closer to the active price and smaller amounts allocated further away.
* **Purpose**:
* Concentrates liquidity where trading activity is highest for optimized returns.
* Extends coverage to support borrowing in bins further from the active price.
### **Wide/Continuum Structure**
Liquidity is evenly distributed across a broad range of bins, regardless of proximity to the active price.
* **Purpose**:
* Ensures stable exposure to both trading and borrowing fees across a wide price range.
* Reduces the need for active management.
### **Ascending/Descending DCA Structure**
Liquidity is placed dynamically, either increasing or decreasing with each bin as it moves further from the active price.
* **Ascending DCA**:
* **Positioned Above the Active Price**: Base assets (e.g., NAD) are added.
* As the price rises, the base asset is gradually sold for the quote asset (e.g., USDC), gradual capturing gains.
* **Descending DCA**:
* **Positioned Below the Active Price**: Quote assets (e.g., USDC) are added.
* As the price falls, the quote asset is gradually converted to the base asset (e.g., NAD), gradual accumulation of assets.
