The Role Of Liquidity Pools In Decentralised Finance
The role of liquidity pools in decentralized finance In the rapidly evolving world of cryptocurrencies, decentralized finance (DEFI) has become a dominant force. DEFI platforms have enabled users to access various financial services without the need for traditional intermediaries such as banks. A key element of these systems is the role of liquidity pools, which play an essential role in facilitation of transactions and the stability of the DEFI markets. What are liquidity pools? A liquidity pool is an algorithmic trading system which allows users to borrow or lend assets without having to keep them physically. This allows more efficient and risk -free commercial execution, by reducing the need for intermediaries and increasing the speed of transactions. In a traditional banking system, liquidity pools serve as a "Paris platform" for…
