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Can someone clarify what exactly a liquidity pool is? I’ve come across this term frequently in crypto discussions, but the explanations seem vague. How does it function within decentralized finance, and why is it crucial for trading? I’d appreciate a detailed breakdown of its mechanics and significance in the ecosystem.

Can someone clarify what exactly a liquidity pool is? I’ve come across this term frequently in crypto discussions, but the explanations seem vague. How does it function within <a data-auto-add="True" href="/feed/faq/categories/Decentralized%20Finance%20Defi" rel="noopener noreferrer" target="">decentralized finance</a>, and why is it crucial for trading? I’d appreciate a detailed breakdown of its mechanics and significance in the ecosystem.

What is a liquidity pool?

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What is a liquidity pool?

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