# Liquidity Reserves

Liquidity provisioning in Dextr involves Liquidity Reserves and Liquidity Positions. 

<figure><img src="/files/1V1dh1ymI3I3FNi22gDz" alt=""><figcaption></figcaption></figure>

### Liquidity Abstraction-based Reserve

* **Adding Liquidity:** When an LP adds liquidity, the assets will be locked in the LP's smart account, and approval will be given to the trade contract through session keys. The LP can add liquidity to one or more assets in the Liquidity Reserve without any restrictions.&#x20;
* **Dynamic Adjustments:** Liquidity token balances automatically update as trades settle, adhering to the predefined parameters of individual liquidity positions.
* **Removing Liquidity:** LPs can withdraw their liquidity for specific assets or the entire liquidity reserve at any time. Complete withdrawal of liquidity of a particular asset from the liquidity reserve, deactivates all associated liquidity positions for that asset, ensuring efficient capital management.

&#x20;By combining the flexibility of the Liquidity Allowance with the strategic control of Liquidity Positions, Dextr empowers LPs to optimize profitability while mitigating risks.


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