Liquidity Providers earn rewards in exchange for supplying their assets to the network. Their assets are added to pools which Swappers use to exchange assets.
The main benefit for Liquidity Providers is that they're able to earn yields on stagnant assets like Bitcoin, Binance Coin etc. This hasn't been possible before. Check out Providing Liquidity for more.
Liquidity Providers are rewarded for keeping their assets in THORChain.
System Income comes from Block Rewards and the Swap Fee. It's then split and some rewards are given to Liquidity Providers.
Liquidity Providers get their rewards when they take their assets back out of THORChain.
Liquidity Providers lend their assets to the network. They can lend the native asset, Rune, or external assets like Bitcoin and Ether.
Liquidity Providers must have assets to deposit in the network. These could be the native asset, Rune, or external assets like Binance Coin, Bitcoin, Ether etc.
Liquidity Providers don't bear any real-world costs like Node Operators. In practice though there are 2 places where they can incur costs on the network—
The protocol doesn't penalize Liquidity Providers.