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The development of decentralized exchanges arose from the need for permissionless interaction with crypto assets
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Liquidity providers are rewarded with Liquidity tokens which can be traded or used as collateral on crypto lending platforms.
The development of decentralized exchanges arose from the need for permissionless interaction with crypto assets. Centralized exchanges allowed a simple user interface and an easy process for trading crypto. In a centralized exchange, liquidity is provided by order books. This is a list of buy and sell orders for an asset that is made on the exchange. Order books show the price at which traders are willing to exchange crypto and how frequently the asset is traded. This method leaves liquidity at the mercy of how many traders are available to trade.
How do liquidity pools in decentralized exchanges work
Decentralized exchanges use liquidity pools which contain a pool of crypto assets deposited by other crypto users t
We współpracy z: https://www.thecoinrepublic.com/2023/07/23/liquidity-pools-potential-tool-for-generating-profit-in-crypto/
