Liquidity Pools

Liquidity pools are shared asset reserves that make AMM trading possible. Instead of relying on one exchange operator, the pool is funded by users who supply tokens to the protocol.

In return, providers receive a claim on their share of the pool and on some of the fees generated by traders who use it.

The LP token represents your proportional ownership, not a fixed promise to receive back the exact same token amounts you deposited.

That detail matters because the pool is constantly rebalancing. By the time you exit, your share may contain more of one asset and less of the other, even though your percentage of the pool stayed the same.