In this post, we’re sharing everything you need to know about how liquidity pools work.

Before DeFi came into existence, it used to be that your only options were to buy, sell or hold tokens on centralized exchanges. Moving the tokens from centralized exchanges to wallets that can interact with Ethereum and Defi opens up a whole new world of possibilities. In 2021, you can deposit tokens with robot hedge funds, earn interest with lending protocols or even mint DAI stablecoins by depositing collateral into the Maker system.

In this installment of the APY.Vision Educational series, we are going to discuss what was recently made possible by Uniswap and the Automated Market Maker (AMM) model, providing liquidity (sometimes referred to as Liquidity Providing, or LPing) to AMM pools to earn revenue on swap fees.

View the full original article here- https://blog.apy.vision/how-liquidity-pools-work/