How does Binance liquidity pool work?

Binance Liquid Swap is based on a pool of liquidity. There are two tokens in each pool, and the relative amount of tokens determines the price between them and can always be traded as long as there are corresponding tokens in the pool . Binance Liquid Swap offers more stable prices and lower fees for large transactions.

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How do liquidity pools work?

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.16 Ara 2021

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What is liquidity pool in cryptocurrency?

A liquidity pool refers to a pool of tokens that are locked in a smart contract, which is a self-executing program based on the agreements between the buyer and seller . The pool enables cryptocurrency trading by providing users with liquidity. Liquidity refers to the ease with which a token can be swapped with another.26 Oca 2022

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