# Providing Liquidity on Delta One **Liquidity Provisioning (LP'ing)** In a vault like Farm SOL-USDC, users deposit USDC, and automatically are matched with an equal value of SOL (based on the current price of SOL) from the available staking pool. Both of these assets are then deposited into the underlying AMM. Farmers never have custody of the staker's funds. Farmers are short volatility, so they **perform the best during a crab market**. If the price of the underlying asset (i.e. SOL) changes, the pool may become imbalanced, leaving the farmer with more or less SOL than what is needed to pay back the staker. Thus, upon a farmer's divest call, Delta automatically swaps for the exact amount needed to repay the stake pool; this means that farmers have some pseudo delta neutral exposure; Farmers can stay delta-neutral by rebalancing often, which realizes the farmer's impermanent loss and resets their position. \ For AMM pools that offer farming for additional rewards, Delta One also allows farmers to stake their LP tokens with a simple click. The rewards that are generated from the extra staking are then sold to re-invest into the pool for more LP tokens. This is known as permissionless auto-compounding, and is run by a set of bots on a regular basis, which anyone can create. Farmers can withdraw at anytime, by first unstaking their position, and then cashing out. Divesting realizes any gains/losses based on the price of the borrowed asset at the time of divesting. In a perfect scenario, since farmers are short volatility, they divest at a time where the current price of the asset is as close as possible to the farmer's average price invested. --- # 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://docs.deltaone.xyz/delta-one/liquidity-provisioning-basics/providing-liquidity-on-delta-one.md?ask= ``` 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.