Liquidity Pool
Last updated
Last updated
A liquidity pool is created when assets are locked in a smart contract for the purpose of providing liquidity. It uses Automated Market Makers (AMMs) / smart contracts to match buyers and sellers with set-price.
It is essential to have a continuous flow of liquidity — demand and supply of NFT — so that trades can happen continuously and efficiently, and liquidity providers are incentivized (with trading fees or profiting from bid-ask spread) by providing assets.
There are various kinds of liquidity pools to choose from on Collection.xyz, depending on the inventory and objective of the liquidity provider:
Advanced Pool
Liquidity providers can now specify the group of NFTs they want to trade against. Liquidity providers can set up pools for specific attributes, token IDs, rarity, hotlists and more!
Basic Pool
Liquidity providers can set up pools that trade against the entire collection.