> For the complete documentation index, see [llms.txt](https://limitless.gitbook.io/ramm/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://limitless.gitbook.io/ramm/participants/liquidity-providers.md).

# Liquidity Providers

These are vault investors, claiming a senior(fixed-rate, protected) position to all instruments attached to the vault. They do so by minting vault shares, where they then gain passive exposure to a wide set of complex strategies for the underlying asset of the vault. 

While these are passive investors, they have the ability to fine-tune their exposure levels to an instrument via the AMM. They can participate in the assessment of an instrument via short-selling the instrument’s ZCB(buy **`shortZCB`**) in this AMM. This allows them to hedge their exposure to the instrument if it is approved. After the instrument is approved, they can buy either **`longZCB`** or **`shortZCB`** based on their risk appetite for the instrument. If they buy **`longZCB`** they would essentially take a leveraged bet on the approved instrument. If they buy **`shortZCB`** they would be hedging against potential losses. 

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By minting vault shares, Liquidity Providers are exposed to a wide set of complex strategies that are sufficiently risk-priced by managers and provided with first loss capital(insurance) 
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Benefits for LPs: 

1. Set and Forget yield
2. Higher risk-adjusted yields due to the underwriting module
3. Insurance buffer from managers
4. Managed by DeFi natives who are forced to align their incentives with LPs via smart contracts
5. Customizable risk exposures for individual instruments,
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