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Liquidity Pools

What Are Liquidity Pools?​

A liquidity pool is a smart contract on a decentralized exchange (DEX) that holds two tokens in equal USD value.
When you trade one token for another (e.g., LIB → DAI), the pool automatically adjusts their ratios using an automated market maker (AMM) formula, keeping the market balanced.

Each pool has its own trading pair, such as LIB / DAI, LIB / wETH

Liquidity providers (LPs) deposit both tokens into these pools and earn a proportional share of trading fees whenever swaps occur.

Why LIB Needs Liquidity Pools​

Liquidity pools are essential for LIB’s usability and price stability. They allow anyone to buy, sell, or swap LIB without relying on centralized intermediaries or order books.

By providing liquidity, users:

  • Ensure smooth trading and tighter spreads in a decentralized way
  • Support price discovery across exchanges
  • Enable instant token swaps without counterparties
  • Earn a share of Uniswap trading fees as liquidity providers

Simply put: liquidity pools give LIB its real-world liquidity and accessibility.

Why DEXs Are Important​

Decentralized Exchanges (DEXs) like Uniswap are the foundation of open, permissionless finance.
Unlike centralized exchanges (CEXs), they:

  • Allow anyone to trade directly from their wallet
  • Require no KYC, sign-up, or custody of funds
  • Are governed by smart contracts, not companies
  • Provide transparency, since all trades occur on-chain

For Liberdus, DEXs ensure that users remain in full control of their LIB tokens in line with the project’s mission of privacy, decentralization, and user sovereignty.