What Are Crypto Liquidity Pools?

Crypto liquidity pools, also known as liquidity pools or liquidity provision pools, are a mechanism used in decentralized finance (DeFi) to provide liquidity to trading pairs on decentralized exchanges (DEXs). A liquidity pool is a pool of assets, typically made up of a combination of cryptocurrencies, made available for trading on a DEX. Users can add assets to the pool and earn a share of the trading fees generated by the pool, while traders can access the assets in the…