# Providing Liquidity

When a Liquidity Provider contributes to a tokenA/tokenB pool in Limitless, they are effectively authorizing the Limitless Protocol to represent their liquidity in a corresponding tokenA/tokenB Uniswap pool. Essentially, this action permits the rehypothecation of their tokenA/tokenB LP position by Limitless.&#x20;

In Limitless, **each liquidity position is 'discretized' into bins**, meaning that while a position is divided into multiple positions within Uniswap, it remains recognized as a single consolidated position in Limitless. The concept is illustrated as follows:



<img src="https://20107516-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FhzaQpygyckQc1GpfmDWt%2Fuploads%2FUgLpjGGGNSl0L5rCwVjs%2Ffile.excalidraw.svg?alt=media&#x26;token=73618fe0-d02c-44c3-97ee-e815ef361d61" alt="Each discretized bin in a Limitless liquidity position is a unique liquidity position in Uniswap" class="gitbook-drawing">

The 'tickDiscretization' parameter, specific to each pool, dictates the division granularity of each LP position. For instance, in a tokenA/tokenB pool with a tickDiscretization of 100, a Limitless position bounded by tickLower: -1000 and tickUpper: 1000 would consist of 20 separate positions on Uniswap.

It's important to note that lower tickDiscretization (implying higher granularity) allows for greater maximum leverage for traders and borrowers, but this comes with the trade-off of increased gas costs for LPs due to the necessity of processing multiple bins.

The reasoning for discretized liquidity is outlined in the following section.&#x20;



