It’s not all bad for liquidity providers as you will also be given a reward in the form of trading fees. Whenever someone trades HSwap, the trader pays a 0.25% fee, of which 0.15% is added to the liquidity pool of the swap pair they traded on.
There are 10 LP tokens representing 10 PUD and 10 HOO tokens.
1 LP token = 1 PUD + 1 HOO
Someone trades 10 PUD for 10 HOO.
Someone else trades 10 HOO for 10 PUD.
The PUD/HOO liquidity pool now has 10.015 PUD and 10.015 HOO.
Each LP token is now worth 1.00015 PUD + 1.00015 HOO.
To make being a liquidity provider even more worth your while, you can also put your LP tokens to work whipping up some fresh yield on the PUD farms (link), while still earning your 0.15% trading fee reward.