Liquidity pools, in essence, are pools of tokens that are locked in a smart contract. They are used to facilitate trading by providing liquidity and are extensively used by some of the decentralized exchange.
You might be interested to also see the following guides:
- Introducing Defi Yield
- What is DeFi?
- What to consider before farming yield?
- What is yield farming?
- What is Total Value Locked (TVL)?
- What Is the Annual Percentage Yield (APY)?
- What is liquidity mining?
- What is composability?
- What is a stablecoin?
- What is a liquidity provider?
- What are wrapped assets?
- What are the potential use cases for DeFi?
- How to avoid getting Rekt with Yield Farming
- Why Are You Miscalculating Your Impermanent Loss And How To Stop Doing It
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