A liquidity pool is a supply of a cryptocurrency that a decentralized exchange leverages to maintain its liquidity and asset prices.
Conventionally, exchanges enact each crypto trade using peer-to-peer transactions. This sequential “order book” system can lead to price slippage. What’s more, a small, decentralized exchange with few users will have low liquidity due to a lack of peers. This renders trading unreliable.
Q: What is Liquidy Pool?
A: is a supply of a cryptocurrency that a decentralized exchange leverages to maintain its liquidity and asset prices.
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