Liquidity pools
Liquidity pools are funds of crypto used to facilitate trades.
By Geoffrey Lyons
Published on Nov 22, 2024
Last modified on Feb 26, 2026

Liquidity pools are funds of crypto used to facilitate trades.
They play an essential role in the operations of crypto marketplaces that don’t have a central body coordinating transactions, also known as decentralized exchanges.
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“Liquidity” + “pool”
In a liquidity pool, crypto is pooled together by various people. This crypto is then used by a decentralized exchange (DEX) as a source of liquidity.
Liquidity is the ready availability of tradable assets. You can think of it as a measure of how easy it is to complete trades on a marketplace.

