What are liquidity pools in the context of Ethereum IDOs, and how do they work?

submitted 6 months ago by auroragrace to cryptocurrency

Liquidity pools are where users can provide liquidity to decentralized exchanges and IDO platforms. In return, they receive liquidity tokens representing their share of the pool. Liquidity providers earn fees from trades, but there are also impermanent loss risks. It's essential to understand these dynamics before participating.

source: https://www.blockchainappfactory.com/ido-token-launchpad-servicessource: https://www.blockchainappfactory.com/ido-token-launchpad-services