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What is Uniswap Liquidity Pool?

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  • What is Uniswap Liquidity Pool?



    In any centralized exchange, the price of any asset is determined by two factors.
    The highest price at which the trader wants to buy/sell that asset and
    The lowest price at which the trader wants to buy/sell that asset

    But in decentralized exchange Uniswap, the price of an asset relies on the exchange contracts.

    In Uniswap, all the Ethereum tokens, ERC 20 tokens are kept in the exchange contract. This decentralized smart contract acts as a matching engine and makes the trades execute faster and does not wait for any desired sellers and prices of crypto assets. Thus, with this liquidity pools of Uniswap drive the price of any assets and does not use any order book to match the buyers and sellers.

    Launch your own DeFi based DEX platform like Uniswap with Uniswap Clone Script
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