As an LP participating in a rewards program on Terminal, you are deploying capital in order to earn yield, while providing a service to the sponsoring project. However, before providing liquidity, it's important to consider the risks.
If a pool has an active program on Terminal, the UI will display an APR % value. This figure represents the annualized rate of return liquidity will yield given the 1) current amount of liquidity in the pool, 2) the current prices of the assets in the pool, 3) the rate of rewards being paid out on liquidity, and 4) the current price of the rewards token(s). If any of these four variables should change, the APR will change as well.
xToken Terminal is a permissionless platform. Anyone can deploy an incentivized pool. For this reason, xToken is unable to endorse or validate any pools on the platform. While a sponsoring project does not have access to your liquidity, they may control a large share of the supply in one or more of the underlying tokens. As such, they may have ability to unduly influence the price of these tokens. Please do your own research on the sponsor for any pool you choose to participate in.
By now, most DeFi users are familiar with the concept of impermanent loss. Providing liquidity on any liquidity pair exposes the LP. In the case of pools that are incentivizing liquidity within a concentrated price range on Uniswap V3, this risk is magnified. Be aware of the risks of impermanent loss before depositing liquidity.