Adding liquidity allows the contributor to earn 0.05% swapping fees from the pairs they've provided. You can supply liquidity and start earning fees via adding liquidity here. Your liquidity can earn even more rewards (GLIDEs) if they're staked at farms! When you've provided liquidity, you will receive Glide-LP tokens (Glide Liquidity Provider tokens) as proof of contribution. For example, if a user deposited $GLIDE and $ELA into a pool they would receive GLIDE-ELA LP tokens. These tokens represent a proportional share of the pooled assets. These LP tokens can be staked at farms to earn GLIDE. We have 6 pairs for you to stake to begin, and plan to expand the list over time as more assets are made available on ESC.
If at the time of a trade, there are 100 Glide-LP tokens representing 100 ELA and 100 GLIDE, each LP token would be worth 1 ELA and 1 GLIDE. If one user trades 10 ELA for 10 GLIDE, and another traded 10 GLIDE for 10 ELA, then there would now be 100.005 GLIDE and 100.005 ELA in the pool. This means each LP token would be worth 1.00005 GLIDE and 1.00005 ELA when it is withdrawn.
You need to provide tokens in a 1:1 value ratio to the liquidity pool. This means that if you are adding to, say, a GLIDE-ELA pool, and wish to provide 1000 ELA worth of liquidity, you would need to convert approx 500 ELA to an equal value of GLIDE tokens first using the swap tool.
If the pool you wish to provide liquidity to does not exist, you can create it yourself. Just provide the tokens and off you go. As the first liquidity provider, you set the initial exchange ratio (price) if one of the tokens in the pair does not exist yet on Glide. This often quickly corrects itself through arbitrage and by more liquidity providers adding to the pool.
Impermanent Loss (know as IL) is one of the risks you take on for being a liquidity provider and is a result of how AMMs function. Here are two articles to better explain it: Understanding Uniswap Returns Beginners Guide to Getting Rekt by Impermanent Loss
They will give you an idea of what IL is and how you are affected by it.
TL;DR: Large swings in the relative price difference of the two tokens in the pool could result in a loss compared to holding the tokens themselves if you withdraw at that precise moment (hence the term impermanent). The loss is only "permanent" if you withdraw your liquidity completely, however that does not mean the IL will necessarily go away over time. Generally speaking, the trading fees received for being a liquidity provider and the yield from the farm can offset IL risk, but nothing is guaranteed.