Liquidity pools

In the realm of decentralized finance (DeFi), liquidity pools play a crucial role. They are essentially reserves of cryptocurrencies stored in a smart contract, which are used to enable transactions. Decentralized exchanges (DEXs) utilize these pools to facilitate traders in swapping between different assets within the pool, replacing the conventional order book model used by traditional exchanges. This system addresses the challenge of liquidity in the decentralized exchange space.