With the advent of smart contracts, passive liquidity providing became popular. In an AMM, LPs deposit crypto assets, where a static equation manages their position(s). This is easy to use, anyone can stake their assets with the press of a button, but in practice, many LPs lose money and underperform a simple buy-and-hold strategy.
The ideal liquidity system has the benefits of both active and passive liquidity! LPs need the flexibility to protect their positions and optimize returns, but the system should also be accessible and easy to use.
Here is how Rubicon Pools unites active and passive liquidity providers: