A Continuous Liquidity Pool is a system where reserves of two different tokens are deposited to facilitate trading. These pools allow for decentralized trading without the need for a traditional order book. The pricing of assets in the pool is determined algorithmically based on the ratio of tokens available in the reserves.
Traders can swap one token for another by providing liquidity to the pool. When a trade occurs, the pool’s reserves are adjusted automatically to reflect the new asset balances. This constant adjustment ensures that the pool maintains adequate liquidity for trading at any time.
Continuous Liquidity Pools are popular in decentralized exchanges, as they allow for efficient and seamless trades without relying on external market makers. Users can easily swap between tokens at any time, benefiting from competitive prices and low slippage.
These pools are designed to keep trading fees low and enable high-speed transactions. By providing a continuous flow of liquidity, they help support the smooth operation of decentralized trading platforms.
