> For the complete documentation index, see [llms.txt](https://docs.ws.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ws.exchange/advanced-topics/understanding-returns.md).

# Understanding Returns

WhiteSwap incentivizes users to add liquidity to pools by rewarding providers with fees on trades. Market making, in general, is a complex activity that has the risk of losing money (compared to just **hodling**) in the case of big directional moves of the underlying asset price.

## Risks <a href="#risks" id="risks"></a>

To understand the risks associated with providing liquidity, you can read <https://medium.com/@pintail/uniswap-a-good-deal-for-liquidity-providers-104c0b6816f2> to get an in-depth look at how to conceptualize a liquidity position.