Understanding Liquidity Pools
Liquidity pools are smart contracts that hold pairs of tokens to enable decentralized trading. Users add tokens like BNB and USDT to a pool and earn a portion of trading fees. Platforms like PancakeSwap and Uniswap use this model. Providing liquidity can generate rewards but also carries risks like impermanent loss. Binance Academy offers excellent guides to get started with liquidity mining safely.
