A liquidity pool is a smart contract pool of tokens used to support swaps or other DeFi activity.
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Short definition
Liquidity Pool is a liquidity pool is a smart contract pool of tokens used to support swaps or other DeFi activity.
Simple explanation
Liquidity providers deposit assets into pools so traders can swap against them.
Why it matters
Pool depth affects slippage, price impact, trading availability, and token launch behavior.
Example context
A DEX may have a pool containing BNB and a BEP-20 token for swaps.