# Example: Liquidity Provider Incentivization

In this example, our user (Jane) wishes to send USDC from her address on Ethereum to her address on Solana. She wants the transaction to happen quickly, securely, and cheaply - and she wants to be sure the transaction did occur (“transaction certainty”).

For this purpose, the Kima protocol should automatically adjust the liquidity level desired in the pools per the following rules:

* Maintain a lower bound on liquidity in active pools, allowing for low-fee, quick transactions and quickly replenishing them if the level falls below this lower bound
* Maintain **minimal liquidity** in low activity pools
* Easily identify inactive pools becoming active and active pools whose activity is diminishing and update the liquidity thresholds accordingly

**Passive Liquidity Providers** deposit liquidity into the system for some time. They earn a portion of the system fees throughout this period (see “Incentive Scheme”).

**Active Liquidity Providers** can collect bounties in return for depositing into prioritized pools. They can choose to withdraw their deposited funds shortly after, from the same pool or a different one, or maintain their liquidity position in the system, enjoying their portion of the fees collected while they do so. By being Active Liquidity Providers, who follow the system priorities and move liquidity around, they enjoy another source of income - liquidity bounties -  on top of fee income.

The Kima platform relies on Active Liquidity Providers to accomplish this through an incentive scheme.


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