#Liquidity101 Binance’s Liquidity101 is an educational feature that introduces users to the basics of liquidity provision—a process where users contribute their crypto assets to liquidity pools to facilitate trading on the platform. In return, liquidity providers earn a share of trading fees, making it a potential source of passive income.

To get started, users navigate to the “Earn” section on Binance and select “Liquidity Farming.” From there, they choose a trading pair, add liquidity by depositing a set amount of tokens, and monitor their investment over time. The platform offers user-friendly tools to manage and track liquidity positions.

Participating in liquidity pools benefits both users and the broader exchange ecosystem. It helps maintain market efficiency by ensuring there’s enough liquidity for smooth trading while also offering participants the chance to earn rewards.

However, users should be mindful of risks such as market volatility and impermanent loss—where the value of their deposited assets may change compared to simply holding them. Binance encourages informed participation by providing resources through Binance Academy.

Liquidity101 is Binance’s gateway for users to learn and participate in liquidity farming with a balance of opportunity and caution.