What is a Liquidity Pool? - Crypto in Plain English – Episode 26 - by cryptohunt.it
Crypto in Plain English - by cryptohunt.it2 Nov 2021

What is a Liquidity Pool? - Crypto in Plain English – Episode 26 - by cryptohunt.it

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

Today: We explain liquidity pools.

If you want to exchange one token for another, you have to have a market, meaning you'll have to find another person to swap you at the rate you both agree to.

Remember: Centralized exchanges like Binance have enough users to match them directly when they want to swap – for a fee.

Liquidity pools take this concept and decentralize it, so that you don't need a massive amount of users on centralized exchanges anymore.

For that to work, people who hold both tokens of a pair you'd like to swap, send those to a liquidity pool. The tokens then disappear from their wallet and get transferred over to that pool, and in exchange they get a third token that proves ownership over the amount they committed. They can exchange that back at any time.

That's how the pool is getting filled.

But back to you: if you want to exchange two tokens and the corresponding liquidity pool is full enough to fulfill your swap, it'll do that using those tokens that are already in it. You exchange for the token you wanted and pay a fee. That fee is then distributed to the people who originally funded the pool, letting their money work for them. And those rewards can add up quickly if a pool has a lot of activity.

And next we explain staking - in plain English, like always. Hear you then!

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.

Episoder(373)

What is the Ethereum Merge and when is it happening? - Crypto in Plain English - Episode 229 - by cryptohunt.it

What is the Ethereum Merge and when is it happening? - Crypto in Plain English - Episode 229 - by cryptohunt.it

What is the Ethereum Merge and when is it happening? Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English. The so-called Ethereum Merge has been all over ...

15 Aug 20221min

What is Decentraland... and what does it have to do with NFTs? - Crypto in Plain English - Episode 228 - by cryptohunt.it

What is Decentraland... and what does it have to do with NFTs? - Crypto in Plain English - Episode 228 - by cryptohunt.it

What is Decentraland... and what does it have to do with NFTs? Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English. Ever wondered what people actually re...

12 Aug 20221min

Barbie is now an NFT - Crypto in Plain English - Episode 227 - by cryptohunt.it

Barbie is now an NFT - Crypto in Plain English - Episode 227 - by cryptohunt.it

Barbie is now an NFT Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English. Barbie, the iconic plastic doll that lives in hundreds of millions of kids' toy...

11 Aug 20221min

How Ray Ban is betting on the Metaverse with virtual sunglasses - Crypto in Plain English - Episode 226 - by cryptohunt.it

How Ray Ban is betting on the Metaverse with virtual sunglasses - Crypto in Plain English - Episode 226 - by cryptohunt.it

How Ray Ban is betting on the Metaverse with virtual sunglasses Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English. Remember the sunglasses Tom Cruise w...

10 Aug 20221min

What are "NFTiffs", the crypto-related jewelry from Tiffany? - Crypto in Plain English - Episode 225 - by cryptohunt.it

What are "NFTiffs", the crypto-related jewelry from Tiffany? - Crypto in Plain English - Episode 225 - by cryptohunt.it

What are "NFTiffs", the crypto-related jewelry from Tiffany? Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English. Luxury jewelry brand Tiffany just relea...

9 Aug 20221min

What are the Nike’s Cryptokick sneakers? - Crypto in Plain English - Episode 224 - by cryptohunt.it

What are the Nike’s Cryptokick sneakers? - Crypto in Plain English - Episode 224 - by cryptohunt.it

What are the Nike’s Cryptokick sneakers? Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English. This week, we are taking a deeper look at how brands are ta...

8 Aug 20221min

What is "Flippening"? - Crypto in Plain English - Episode 223 - by cryptohunt.it

What is "Flippening"? - Crypto in Plain English - Episode 223 - by cryptohunt.it

What is "Flippening"? Welcome to the cryptohunt jam where we spend one minute a day explaining crypto. In plain English. Ever hear a crypto enthusiast get excited about an event they call "flippening"...

5 Aug 20221min

What is the Howey Test? - Crypto in Plain English - Episode 222 - by cryptohunt.it

What is the Howey Test? - Crypto in Plain English - Episode 222 - by cryptohunt.it

What is the Howey Test? Welcome to the cryptohunt jam where we spend one minute a day explaining crypto. In plain English. You've probably just listened to yesterday's episode on Uniswap, the decentra...

4 Aug 20222min

Populært innen Business og økonomi

stopp-verden
dine-penger-pengeradet
lydartikler-fra-aftenposten
e24-podden
rss-penger-polser-og-politikk
rss-borsmorgen-okonominyhetene
pengepodden-2
finansredaksjonen
tid-er-penger-en-podcast-med-peter-warren
livet-pa-veien-med-jan-erik-larssen
morgenkaffen-med-finansavisen
rss-markedspuls-2
pengesnakk
utbytte
lederpodden
rss-pa-konto
liberal-halvtime
rss-fa-makro
rss-investering-gjort-enkelt
rss-impressions-2