# FAQ

## LPs 

1. **Are Limitless LPs traders' counterparties?** 

   In Limitless, LPs aren't the traders' counterparties; rather, they serve only as lenders from whom the traders' leverage is obtained(positive sum relationship). Contrary to being counterparties, LPs benefit from traders' positive PnL through the [profit sharing](/limitless/intro/participants/liquidity-providers.md) mechanism. 
2. **Are pools isolated?**

   Yes, all token-specific risks are isolated within a pool. 
3. **What are the risks for LPs?**

   The risks LPs undertake are 

   1. Impermanent Loss Risk
   2. Smart Contract Risk
   3. Illiquidity Risk(not able to fully withdraw when a range is max utilized)

   There are no counterparty risks as the LPs are not the traders' counterparties. 
4. **How can LPs maximize yield?** 

   This is outlined in the [premium model ](/limitless/intro/premium-model.md)section. 
5. **Can an LP provide single-sided liquidity and earn yield?**

   Yes, since the idle portion of an LP's position is lent out, an LP can earn yield with one asset. This would be akin to a covered call position. When 

## Traders

1. **Do I have to continuously manually pay premiums?** 

   Yes, but only when your premium deposit is nearing depletion. By topping up your deposit with a sufficient amount to endure, you can avoid the hassle of frequent manual payments. Any leftover premiums in the deposit are available for withdrawal once the position is closed.
2. **How do the isolated pairs work? Is the collateral agnostic?** 

   Example: For a WETH/USDC pool, you can only use WETH as margin to short WETH/USDC and USDC to long WETH/USDC.
3. **What's the maximum position size?** 

   The maximum position size in Limitless would be dependent on the available borrowable liquidity(shown on the frontend). If there is 1M of liquidity in the pool then the maximum borrowable amount for leverage would be 1M. 
4. **How is it possible to leverage against any ERC20?** 

   This is possible because of our oracle-free architecture. All collateral pricing is market-driven using the Uniswap AMM, which is the source of leverage for traders and where LPs provide liquidity to. 

<br>


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://limitless.gitbook.io/limitless/intro/faq.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.