# 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.”\
**Step 3:** Navigate to the “Flexible V3” or “Classic V2” tab, depending on your preference.
**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 %}
**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 %}
**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.
***
## 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.
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