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What Is a Token Pair and Why Is It Essential for a Liquidity Pool?

A token pair (e.g. XYZ/ETH) provides the two assets necessary for a swap and defines the ratio within the liquidity pool.
Greeks.Live17.11.25

What Is a Token Pair and Why Is It Essential for a Liquidity Pool?

A token pair consists of two different crypto assets that are deposited together into a liquidity pool, for example, a new project token (XYZ) and a base asset like ETH. This pairing is essential because it defines the ratio and the assets available for a trade.

When a user wants to buy XYZ, they deposit ETH, and the pool's ratio adjusts. Without a pair, there is no exchange mechanism, as the pool needs two assets to facilitate a swap.

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