Important keynotes
Liquidity pool is essentially a pool of tokens locked up using a smart contract.
Main purpose of a liquidity pool is to facilitate the trading exchanging time and provide liquidity.
Liquidity pool enhances fast exchange efficiency by cutting waiting time. ( no need for order book )
Liquidity providers ( LP ) receive a portion of the trading fee as an incentive for providing liquidity.
Trading on a centralized exchange like binance requires a trader to patiently wait for an order book to be filled before his/her open/pending trade will be filled this could be a limitation, buying/selling a low market cap token could be time-consuming sometimes a trader will need to wait for hours before having his opened trade will be bought by another trader.
Selling/buying a coin on any centralized exchange will always require another trader to buy such pending order if no one chooses to buy such an order your trade will be open/pending for days/hour till someone decides to buy.
The above illustration shows how trading on a centralized exchange could be time-consuming especially when trading a low market cap token.
With the inception of DeFi and integration of liquidity pools, these limitations were countered using Automated Market Maker ( AMM ) waiting time for buying/selling of tokens was eliminated, traders/investors can instantly exchange tokens of choice without the need for order book to be filled by another trader.
To participate or benefit from the liquidity pool interested users need to deposit trading pairs of crypto on the pool which are mostly in an equivalent portion.
By providing liquidity of either crypto pair let's say BNB-ETH a user will start earning from transaction fees completed using BNB-ETH this means whenever a trade is completed on the exchange platform using BNB-ETH the liquidity provider will earn a commission from the completed transaction.
Popular DeFi liquidity providing platforms like PancakeSwap and, Uniswap are typical examples of exchanges using liquidity pools.
RobiniaSwap a newly launched DeFi exchange platform allow users to provide liquidity on the platform pool and in return get rewarded for providing liquidity.
Crypto asset pairs like RBS-BNB, USDT-RBS, Bsteem-RBS, and more can be provided by liquidity providers to earn passive income from pools.
For more information about RobiniaSwap check out the links below
Website
https://robiniaswap.com/
Coinmarketcap
https://coinmarketcap.com/currencies/robiniaswap-token/
Coingecko
https://www.coingecko.com/en/coins/robiniaswap-token
RobiniaSwap Official Documentation
https://robiniaswap.gitbook.io/robiniaswap/
Discord
https://discord.gg/wGv4UjER2f