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What Is a Liquidity Pool and Why Is It Essential for a Decentralized Exchange (DEX)?

Liquidity pools are locked tokens in a smart contract, enabling instant, automated trading on a DEX.
Greeks.Live17.11.25

What Is a Liquidity Pool and Why Is It Essential for a Decentralized Exchange (DEX)?

A liquidity pool is a collection of two or more tokens locked in a smart contract to facilitate trading on a DEX. It is essential because it provides the necessary assets for traders to swap instantly, eliminating the need for a traditional buyer and seller to be present at the same time.

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