diff --git a/common/add-liquidity.ts b/common/add-liquidity.ts
index 9271bbbf..47b3c1e9 100644
--- a/common/add-liquidity.ts
+++ b/common/add-liquidity.ts
@@ -1,4 +1,4 @@
-import { addCpmmLiquidity, getCpmmLiquidity } from './calculate-cpmm'
+import { getCpmmLiquidity } from './calculate-cpmm'
 import { CPMMContract } from './contract'
 import { LiquidityProvision } from './liquidity-provision'
 
@@ -8,25 +8,23 @@ export const getNewLiquidityProvision = (
   contract: CPMMContract,
   newLiquidityProvisionId: string
 ) => {
-  const { pool, p, totalLiquidity } = contract
+  const { pool, p, totalLiquidity, subsidyPool } = contract
 
-  const { newPool, newP } = addCpmmLiquidity(pool, p, amount)
-
-  const liquidity =
-    getCpmmLiquidity(newPool, newP) - getCpmmLiquidity(pool, newP)
+  const liquidity = getCpmmLiquidity(pool, p)
 
   const newLiquidityProvision: LiquidityProvision = {
     id: newLiquidityProvisionId,
     userId: userId,
     contractId: contract.id,
     amount,
-    pool: newPool,
-    p: newP,
+    pool,
+    p,
     liquidity,
     createdTime: Date.now(),
   }
 
   const newTotalLiquidity = (totalLiquidity ?? 0) + amount
+  const newSubsidyPool = (subsidyPool ?? 0) + amount
 
-  return { newLiquidityProvision, newPool, newP, newTotalLiquidity }
+  return { newLiquidityProvision, newTotalLiquidity, newSubsidyPool }
 }
diff --git a/common/contract.ts b/common/contract.ts
index 2656b5d5..dd2aa70a 100644
--- a/common/contract.ts
+++ b/common/contract.ts
@@ -91,7 +91,8 @@ export type CPMM = {
   mechanism: 'cpmm-1'
   pool: { [outcome: string]: number }
   p: number // probability constant in y^p * n^(1-p) = k
-  totalLiquidity: number // in M$
+  totalLiquidity: number // for historical reasons, this the total subsidy amount added in M$
+  subsidyPool: number // current value of subsidy pool in M$
   prob: number
   probChanges: {
     day: number
diff --git a/common/new-contract.ts b/common/new-contract.ts
index 9a73e2ea..241f0a0f 100644
--- a/common/new-contract.ts
+++ b/common/new-contract.ts
@@ -111,6 +111,7 @@ const getBinaryCpmmProps = (initialProb: number, ante: number) => {
     mechanism: 'cpmm-1',
     outcomeType: 'BINARY',
     totalLiquidity: ante,
+    subsidyPool: 0,
     initialProbability: p,
     p,
     pool: pool,
diff --git a/functions/src/add-subsidy.ts b/functions/src/add-subsidy.ts
new file mode 100644
index 00000000..b3ed1895
--- /dev/null
+++ b/functions/src/add-subsidy.ts
@@ -0,0 +1,78 @@
+import * as admin from 'firebase-admin'
+import { z } from 'zod'
+
+import { Contract, CPMMContract } from '../../common/contract'
+import { User } from '../../common/user'
+import { getNewLiquidityProvision } from '../../common/add-liquidity'
+import { APIError, newEndpoint, validate } from './api'
+
+const bodySchema = z.object({
+  contractId: z.string(),
+  amount: z.number().gt(0),
+})
+
+export const addsubsidy = newEndpoint({}, async (req, auth) => {
+  const { amount, contractId } = validate(bodySchema, req.body)
+
+  if (!isFinite(amount) || amount < 1) throw new APIError(400, 'Invalid amount')
+
+  // run as transaction to prevent race conditions
+  return await firestore.runTransaction(async (transaction) => {
+    const userDoc = firestore.doc(`users/${auth.uid}`)
+    const userSnap = await transaction.get(userDoc)
+    if (!userSnap.exists) throw new APIError(400, 'User not found')
+    const user = userSnap.data() as User
+
+    const contractDoc = firestore.doc(`contracts/${contractId}`)
+    const contractSnap = await transaction.get(contractDoc)
+    if (!contractSnap.exists) throw new APIError(400, 'Invalid contract')
+    const contract = contractSnap.data() as Contract
+    if (
+      contract.mechanism !== 'cpmm-1' ||
+      (contract.outcomeType !== 'BINARY' &&
+        contract.outcomeType !== 'PSEUDO_NUMERIC')
+    )
+      throw new APIError(400, 'Invalid contract')
+
+    const { closeTime } = contract
+    if (closeTime && Date.now() > closeTime)
+      throw new APIError(400, 'Trading is closed')
+
+    if (user.balance < amount) throw new APIError(400, 'Insufficient balance')
+
+    const newLiquidityProvisionDoc = firestore
+      .collection(`contracts/${contractId}/liquidity`)
+      .doc()
+
+    const { newLiquidityProvision, newTotalLiquidity, newSubsidyPool } =
+      getNewLiquidityProvision(
+        user.id,
+        amount,
+        contract,
+        newLiquidityProvisionDoc.id
+      )
+
+    transaction.update(contractDoc, {
+      subsidyPool: newSubsidyPool,
+      totalLiquidity: newTotalLiquidity,
+    } as Partial<CPMMContract>)
+
+    const newBalance = user.balance - amount
+    const newTotalDeposits = user.totalDeposits - amount
+
+    if (!isFinite(newBalance)) {
+      throw new APIError(500, 'Invalid user balance for ' + user.username)
+    }
+
+    transaction.update(userDoc, {
+      balance: newBalance,
+      totalDeposits: newTotalDeposits,
+    })
+
+    transaction.create(newLiquidityProvisionDoc, newLiquidityProvision)
+
+    return newLiquidityProvision
+  })
+})
+
+const firestore = admin.firestore()
diff --git a/functions/src/index.ts b/functions/src/index.ts
index 763fd8bb..622b7e4a 100644
--- a/functions/src/index.ts
+++ b/functions/src/index.ts
@@ -44,8 +44,6 @@ export * from './sell-bet'
 export * from './sell-shares'
 export * from './claim-manalink'
 export * from './create-market'
-export * from './add-liquidity'
-export * from './withdraw-liquidity'
 export * from './create-group'
 export * from './resolve-market'
 export * from './unsubscribe'
@@ -53,6 +51,7 @@ export * from './stripe'
 export * from './mana-bonus-email'
 export * from './close-market'
 export * from './update-comment-bounty'
+export * from './add-subsidy'
 
 import { health } from './health'
 import { transact } from './transact'