A liquidity provider is someone who provides assets (liquidity) to a pool of funds. The more liquidity provided to a pool, the less slippage there is on a trade and the better the price discovery. By providing liquidity to Uniswap, the liquidity provider is rewarded by receiving a share of the fees earned in that pool proportional to the liquidity provided. This is one of the simplest and lowest risk forms of yield farming on Ethereum.
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