how do liquidity providers operate?

liquidity providers (LPs) on cypher are slightly different from those on your typical decentralized trading platform. instead of LPs providing an asset pair to an AMM to ensure the pool is healthy enough to trade and be priced fairly, cypher leverages a decentralized orderbook on serum and allows for margin trading. this means LPs can both be minters (who help provide cAssets to the market for trading) as well as market makers. these two types of LPs are incentivized differently. LP minters receive a pro-rata portion of the trading fees generated by the market in which they help provide liquidity (and digital assets exchange services to other users). LP market makers are incentivized by bid-ask spreads and, eventually, by reduced trading fees assuming they hold a significant number of cypher’s to-be-issued native token.