#Liquidity101 Liquidity Pool
On most decentralized exchanges (DEX) like Uniswap, PancakeSwap, etc., liquidity is created through liquidity pools. Example: an ETH/USDT pool.
Anyone can provide liquidity, meaning they can supply a pair of tokens of equal value (e.g. €500 of ETH and €500 of USDT).
✅ 2. Liquidity provider (LP)
These are the users who put their tokens in the pools. In return:
They receive fees on the transactions that pass through the pool (e.g. 0.3% for each trade).
Sometimes they also receive protocol tokens as an incentive (liquidity mining).
