It’s not all bad for liquidity providers as you will also be given a reward in the form of trading fees. Whenever someone trades CowSwap, the trader pays a 0.2% fee, of which 0.17% is added to the liquidity pool of the swap pair they traded on.
There are 10 LP tokens representing 10 GOUDA and 10 BNB tokens.
1 LP token = 1 GOUDA + 1 BNB
Someone trades 10 GOUDA for 10 BNB.
Someone else trades 10 BNB for 10 GOUDA.
The GOUDA/BNB liquidity pool now has 10.017 GOUDA and 10.017 BNB.
Each LP token is now worth 1.00017 GOUDA + 1.00017 BNB.
To make being a liquidity provider even more worth your while, you can also put your LP tokens to work whipping up some fresh yield on the GOUDA farms, while still earning your 0.17% trading fee reward.