What Are the Risks of Being a Liquidity Provider to a DAO’s Pool?

The main risks for a liquidity provider (LP) are impermanent loss (IL), smart contract risk, and potential price exposure to both assets in the pool. If one asset's price significantly deviates from the other, the IL can outweigh the trading fees earned.

LPs also face the risk of a rug pull if the DAO's team is malicious, though this is less common in established DAOs.