A liquidity pool can be thought of as a pot of cryptocurrency assets locked within a smart contract, which can be used for exchanges, loans and other applications . In traditional finance (Centralised Finance or CeFi), liquidity is provided by a central organisation, such as a bank or a stock exchange.
Read moreWhat is liquidity pooling?
by Avinandan Banerjee. Crypto Liquidity Pools are an essential part of the DeFi ecosystem. These pools are a collection of tokens or digital assets stored in a smart contract . These pools, among other things, help to facilitate decentralized trading and reduce the danger of washout.
Read moreWhat is locked liquidity?
Locking liquidity makes the funds immovable until they are unlocked . This means that a certain percentage of the asset has been locked and can not be withdrawn by the developers which give investors a sense of security against their investments. Liquidity is locked using time-locked smart contracts.
Read moreWhat is liquidity lockup time?
Lock-up periods are when investors cannot sell particular shares or securities . Lock-up periods are used to preserve liquidity and maintain market stability. Hedge fund managers use them to maintain portfolio stability and liquidity. Start-ups/IPO’s use them to retain cash and show market resilience.
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