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

# Providing Hearth liquidity

> Supply XFG/HEAT liquidity on Hearth with balanced deposits and earn the pool's trading P&L.

Liquidity providers supply inventory to Hearth so traders can swap XFG↔HEAT with depth.

## What you earn

Hearth charges **1%** (`HEARTH_FEE_BPS = 100`) on trades — paid by the **taker** (fee-adjusted output), debited from pool reserves into the **CD yield accumulator**. LPs do **not** earn the flat fee.

LP income is the **pool’s own trading P\&L**:

* The taker pays the fee-adjusted amount, so the pool retains the fee-adjusted spread on every fill.
* Reserve appreciation from limit-order execution at the spot price.
* No separate “spread reward” formula exists anymore (the old `|fill.price − P_clear| × amount` reward belonged to the retired in-band matcher). Your share is realized on withdrawal via proportional share redemption.

You also do **not** earn the atomic-swap fee stream (2% = 1% + 1% per swap) unless you hold HEAT CDs or Bonus Vault rights — those are separate. Protocol earnings are exactly two streams: this 1% Hearth fee and the 2% atomic swap fee. Mint premium is 0 bps (goes nowhere); the 0.1% CD creation fee is burned to the Treasury LP Manager, not protocol revenue.

## Deposits

* **Balanced only.** A single-sided deposit (XFG alone or HEAT alone) mints no shares — the pool requires ratio-paired deposits at the current pool ratio. No dilution.
* Shares are minted pro-rata (`min(amountA×T/reserveA, amountB×T/reserveB)`) — fair shares at the pool ratio.
* The **Treasury LP Manager** follows the same rule: it pairs its XFG leg (treasury fee share + donations) with its HEAT leg (mint premiums + HEAT donations) at the pool ratio and deposits only when both legs can be paired; the excess carries to the next epoch.

## Practical notes

* Prefer dual-sided XFG + HEAT inventory at the current pool ratio.
* Price moves create **impermanent loss** relative to holding outside the pool; trading P\&L may or may not offset it.
* Use wallet / daemon RPC for your build (`lp_deposit` / pool methods if exposed). Exact CLI names vary by version — check `--help` and [API overview](/api-reference/overview).

## Withdraw

Withdrawing burns your LP shares and returns your proportional share of both reserves. Confirm maturity / unlock rules if your position is commitment-tagged (`DEPOSIT_TERM_LP` in protocol terms).

## See also

* [How Hearth works](/features/hearth/how-hearth-works)
* [Fee earning](/features/hearth/fee-earning)