The tokens are distributed to the liquidity providers by the minter. The minter rewards liquidity providers with CRV tokens, which are earned through a fee distribution contract. This contract allows liquidity providers to earn fees from trading fees collected on the platform. The fees are distributed proportionally to the amount of liquidity that each provider has contributed to the pool. The rewards are paid out in CRV, which can be used to purchase more tokens or exchanged for other cryptocurrencies. This system encourages liquidity providers to contribute more to the pool, as they can earn more rewards for doing so.
