What is liquidity pool in DeFi? Have you heard of those degens doing LP at 200-300% yields? Or terms like yield-farming, harvesting, DEX, impermanent loss, automated market-maker (AMM)? What are all these buzzwords and hype about? In this article, I will be going through the basic concepts of liquidity pool in DeFi as I believe this is one of the most important skills you need to learn today. 1. What is a Liquidity Pool in DeFi? Over the past decades, we have been using centralized exchanges and order books. You have buyers and sellers putting their limit buy or sell price along with the quantity to trade. When there is a match, both orders are filled and the exchange earns a commission. While this works for traditional finance, it is not applicable for ethereum which is decentralized. There is no centralized party to hold the funds and on-chain