In order for users to be able to buy/sell outcome shares, markets are required to have liquidity.

With Polkamarkets, Market Creators must add liquidity to any market that they create. From then on, any individual, including market creators, can add or remove liquidity at any moment until the market expires.

Users that contribute liquidity to a market, also known as Liquidity Providers, earn a 2% fee from every buy and sell transaction that happens on that market. The rewards are proportional to the number of liquidity shares held by Liquidity Providers.

For example, let's say that Liquidity Provider A has provided 60% of a market's liquidity, and therefore holds 60% of the market's liquidity shares. Now say that Forecaster B buys 1 ETH worth of outcome A, paying a 0.02 ETH fee (2% of the trade value) to liquidity providers. Liquidity Provider A will earn 60% of the 0.02 ETH fee, ie. 0.012 ETH.

Markets with a high amount of liquidity benefit from a smaller price impact when forecasters buy or sell large amounts of outcome tokens, which in turn results in a more accurate forecast.

Markets with a high number of trades will therefore yield superior rewards to Liquidity Providers than markets with a low trading volume.

It is important to note that adding liquidity is not without risk. Make sure you understand the Strategies and Risks for liquidity providers before providing liquidity to a market.

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