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 pool and how it works?
Liquidity pools are a mechanism by which users can pool their assets in a DEX’s smart contracts to provide asset liquidity for traders to swap between currencies . Liquidity pools provide much-needed liquidity, speed, and convenience to the DeFi ecosystem.
Read moreHow much can you earn from liquidity pool?
Depending on the pool you’re invested in and the amount of transactions on Uniswap, you can earn anywhere from 2% to 50% annual interest from liquidity provider fees.
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