Uniswap Liquidity pool gather tokens in a smart contract model, and users trade against the liquidity pool. On Uniswap, you or anybody can easily swap tokens; add tokens to a pool to earn some fees. You can also list a token on Uniswap. The exchange and there is no intermediary facilitating these transactions.
Suitably, what is Uniswap liquidity pool?
Each Uniswap liquidity pool is a trading venue for a pair of ERC20 tokens. When a pool contract is created, its balances of each token are 0; in order for the pool to begin facilitating trades, someone must seed it with an initial deposit of each token.
Notwithstanding, what is liquidity pool? Liquidity pools are pools of tokens, locked in a smart contract to facilitate trading by providing liquidity. They are used by Automated Market Makers (AMM) to reduce price change when trading on the decentralized exchanges.
Briefly, how do I add liquidity to Uniswap pool?
Step by step instructions
How is Uniswap price calculated?
Uniswap depends on the “constant product” principle to govern trading — that is the product of the two liquidity pools should be the same after a trade as before (excluding fees). The Uniswap price is given by the ratio of the two liquidity pools. The constant product is therefore price-independent.