Liquidity Pool

For any financial market, liquidity is necessary. Similarly, liquidity pools play a huge role in creating a liquid decentralized finance system. Liquidity pools refer to the accumulation & collection of digital assets & tokens which are locked in smart contracts which ensure superior liquidity for decentralized exchanges. Where traditional markets depend on buyers and sellers for liquidity, Surfpro DeFi depends on liquidity pools to function effectively.

In simpler terms, liquidity pools are digital piles or stacks of cryptocurrencies governed by smart contracts. Liquidity pools are also critical for yield farming, as well as blockchain gaming applications. Liquidity pools or LPs also reward users who stake their digital assets in the pool. Rewards can be in the form of a fraction of trading fees, crypto rewards, and others.