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Liquidity Pool

Estimated reading: 1 minute
Byepix Liquidity pools are one of the main technologies behind the current Byepix De-Fi ecosystem. Automated market makers (AMMs), borrowing-lending protocols, yield farming, synthetic assets, on-chain insurance, blockchain games, and more form the core part of a long list.
DEX volumes are now competitive with the volumes of centralized exchanges. As of December 2020, the locked value in DeFi protocols reached almost $15 billion. This ecosystem is in constant growth with new types of crops.
A liquidity pool is funds locked in a smart contract. Liquidity pools support decentralized trading, lending, and many other functions that we will explore later.
Liquidity pools are the backbone of many De-Fi projects like Byepix. Users named liquidity providers (LP) can add two tokens of equal value to a pool to create a market. In exchange for providing their funds, they earn from the fees charged on the transactions made in their pool. Their earnings are directly proportional to their share of the total liquidity. Byepix has made the market more accessible, as anyone can become a liquidity provider.