What is a Liquidity Pool?
The short answer
A pool of crypto locked in a smart contract that enables trading or lending without a traditional order book.
Instead of matching individual buyers and sellers, many DeFi platforms use liquidity pools — shared funds that anyone can trade against, with the pool’s balance adjusting automatically based on activity.
Related terms
Full glossaryMarket Cap
A coin's price multiplied by how many coins exist — a rough measure of overall size.
Altcoin
Informal shorthand for any cryptocurrency that isn't Bitcoin.
Peg
The target value a stablecoin is designed to maintain, typically $1 for dollar-pegged coins.
Node
A computer that keeps a copy of a blockchain's full transaction history and helps verify new transactions.
Blockchain
A shared, tamper-evident record of transactions, copied across many independent computers instead of one company's private database.
All-Time High (ATH)
The highest price a cryptocurrency has ever reached.
Still unclear? That is worth knowing — tell us and we will rewrite this entry.