What is Liquidity Pool

A liquidity pool is used by decentralized exchanges. It is essentially a reserve of coins that are locked up using smart contracts. This is done to supply the exchange with liquidity and to permit trades to occur with little slippage.

Users who supply the resources locked up in the liquidity pool are rewarded thanks to trading fees. Their gains vary according to the portion of liquidity they fund the pool with.

Liquidity Pool

A liquidity pool is a reserve of coins locked up using smart contracts.

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