Glossary

Liquidity pool

Liquidity pool is a smart contract holding a pair of tokens that traders swap against, replacing the traditional order book.

Liquidity providers deposit the pair, roughly 50/50 in value, and receive LP tokens representing their share of the trading fees. Pools power decentralized exchanges on Base such as Aerodrome and Uniswap.

Back to the glossary or read the DeFi guides.