> For the complete documentation index, see [llms.txt](https://docs.h2.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.h2.finance/features/liquidity/earn-lp-rewards.md).

# Earn LP Rewards

Providing liquidity on H2 Finance is an excellent way to earn passive income from trading fees.

## Step by Step Guide

**Step 1:** Ensure your wallet is connected and set to the correct network.

**Step 2:** Select “Pool” in the navigation bar, then click on “Add Liquidity.”\
![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXfjptTEXhnrD4dB1P8q1ikLLnIiJ1Kl4e9upeUbtbedoCIne2J3k2u5oqdmJrwbzzXu7yr23f3Xw2Lv_PpP4SgOoRKHoj2sp54f__QSJa7Taw_cN3c27crQENEexR0H8Kvh64YR1ehrvuhqETUolmQecLs?key=zpJPjakUSPOdrvYl-S9Qqw)

**Step 3:** Navigate to the “Flexible V3” or “Classic V2” tab, depending on your preference.![](/files/VWPOOuS1H1Op0ScTiXlf)

**Step 4:** Pick the token pair you want to provide liquidity for, and enter the amount or select a percentage.

{% hint style="info" %}
*For Classic V2 pools, a flat 0.3% fee is applied to every token swap within the pool, which is distributed proportionally among all LPs based on their share.*
{% endhint %}

![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXcLrwQNCQOsXkCPyga4GDAD2Ojwf8rBi5c5i4lYzD1GeL52gvFkTfXktS1Zk7aavbn_AfqN3japdDPeCfjOVhf9IlQr5QFvWbKxDvIlT2x2fGhI3M78B1hSxLEU2B4HqbDu89THGuHd22mRqPklf5PY_eY?key=zpJPjakUSPOdrvYl-S9Qqw)

**Step 5 (For Flexible V3 Only):** Choose from the available fee tiers (0.01%, 0.05%, 0.3%, 1%) and set your desired price range by dragging the price cutoff lines or entering the min and max prices.

{% hint style="info" %}
*Note: For Flexible V3 pools, there are multiple pools for each token pair, each with a specific fee tier. Swaps are routed through the most efficient pool, and you can choose a tier that matches your strategy, potentially earning higher fees.*
{% endhint %}

![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXd1pKdXQMHoXmvBjFAeilXPpoIASvKGpxUW-xkxJtPaRzPuW6hlky9pQ5s5f2dROfLxZ98_WU8QIMCpQPeHvv5Unh-Nxl8Fk2egkn80JdfaEsBGXyfyrStP14yyn0faEEYXpy9hL162-z6jEm3mpD485_iA?key=zpJPjakUSPOdrvYl-S9Qqw)

**Step 6:** Review your settings and amounts, then click “Add” to provide liquidity. *If it’s your first time providing liquidity for this token pair, click "Enable" to grant H2 Finance permission to interact with your wallet.*

**Last Step:** Click “Supply” and confirm the transaction in your wallet. Once completed, your contribution will be added to the pool, and you'll receive LP tokens.<br>

***

## What is the difference between Classic V2 and Flexible V3 liquidity pools?

The primary difference between V2 and V3 liquidity pools lies in their underlying mechanics.

**Classic V2 Liquidity Pools**

* **Uniform distribution:** Liquidity is evenly spread across the entire price range.
* **Lower capital efficiency:** Less efficient use of capital.
* **Simpler structure:** Easier for new users to manage.

**Flexible V3 Liquidity Pools**

* **Concentrated liquidity:** Providers can focus funds on specific price ranges.
* **Higher capital efficiency:** More efficient use of capital.
* **Increased complexity:** Requires strategic thinking.
* **Fee tiers:** LPs can choose between higher fees with lower liquidity or vice versa.