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  • Introduction
    • Overview
    • Concepts
      • Decentralised Exchange (DEX)
      • Liquidity Pools
      • Swaps
      • Automated Market Maker (AMM)
      • Fees
  • Developers
    • Smart Contracts
      • Error Codes
      • Flash Loans
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      • Pool Interface
    • Joins and Exits
      • Pool Joins
      • Pool Exits
    • Maths
      • Weighted Maths
    • Arbitrage System
      • Arbitrage Functions
    • Swaps
      • Single Swap
      • Batch Swaps
    • Arbitrage Profit Distributor
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  1. Introduction
  2. Concepts

Liquidity Pools

PreviousDecentralised Exchange (DEX)NextSwaps

Last updated 1 month ago

Liquidity pools are decentralised smart contracts that hold reserves of tokens, enabling seamless trading and financial interactions on the blockchain through automated market maker principles. This system allows users to swap tokens directly, bypassing traditional order books or centralised intermediaries, while maintaining liquidity by contributing tokens and earning a share of the generated fees.

Functioning across various blockchain networks, liquidity pools offer a versatile solution for decentralised finance (DeFi) applications, and their non-custodial nature ensures that users retain full control of their assets via self-custodial wallets. All operations are managed by permissionless smart contracts that enforce predetermined pricing formulas and transparent fee structures, creating a trustless framework that securely verifies every transaction on-chain.

A360 DEX uses liquidity pools—decentralized smart contracts that hold token reserves—to enable seamless trading of RWAs and cryptocurrencies. Operating on automated market maker principles, these pools allow users to swap tokens directly, maintain liquidity, and earn fee shares. Smart contracts govern these pools, enforcing pricing formulas and fee structures transparently and securely. This non-custodial framework ensures fair and efficient on-chain transactions.