The primary risks for liquidity providers (LPs) on Liquorice include the possibility of liquidators failing to liquidate bad debt in a timely manner and potential vulnerabilities within the smart contracts. The Liquorice team mitigates these risks through rigorous audits and a robust risk management framework for managing lending pools.

Yield for LPs is generated by professional trading firms who borrow funds from the liquidity pools when they identify profitable trading opportunities. In essence, LPs earn a share of the trading profits generated by these firms through arbitrage and other strategies.

Only professional trading firms are eligible to borrow funds from Liquorice's lending pools. These firms use the borrowed capital to execute arbitrage strategies, profiting from price discrepancies between the Liquorice platform and centralized exchanges or other liquidity sources.

Liquorice supports request-for-quote (RFQ) trading flows from solvers operating within intent-based systems such as CoW Swap, 1inch Fusion, and Uniswap X. These solvers submit requests for liquidity at specific prices, which Liquorice then facilitates.