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Pools
Pools, shorthand for Liquidity Pools, are the primary decentralization effort and incentive of a DEx (Decentralized Exchange). The fundamentals of how pools work, and why they exist, can be found in our Learn section, at Liquidity Pools Basic Overview.
Decentralized Exchanges don't have a pot, massive whales, or angel investors. Thus, the liquidity is drawn from users like you! A user stakes both sides of the token and, to incentivize this action, is given a share of fees generated by sales.
Users receive Liquidity Providing tokens, known as LP tokens, to track their stake into pool. This also tracks and provides the rewards. The name of these tokens is correlated to the staked pair. For example, a user putting in $VYFI an $ADA would get VyFi-ADA-LP.
Users can pool their tokens together for potentially better rewards. This is called Yield Farming.
This is an example of what liquidity pools will look like when live
Last modified 3mo ago