Farming, steaking, two pools. PART I Pretty soon kitty owners | NFT Cat TON Metaverse

Farming, steaking, two pools. PART I

Pretty soon kitty owners will start getting various bonuses for storing their NFT. But there are still people who do not fully understand crypto-terms, and therefore may not understand what benefits our NFTs will give them.

On this occasion we want to talk a little bit about the main concepts in the crypto-sphere.

Liquidity pool. What it is

A liquidity pool is a kind of "reservoir of tokens (crypto coins)". If you need to exchange, for example, TON for TGR, the exchange will take the TON coins from the Liquity Pool and give them to the person. While TGR will go to another similar "reservoir".

Because of this, the transactions are carried out with high speed and the necessary tokens are always available at the exchange. But keep in mind, that we are speaking in very human language, in fact, the exchange does not take anything from anywhere, because everything happens automatically via special code, which is in open access.

Where do the tokens in the pool come from and why put them there?

Tokens in the pool appear thanks to liquidity providers who fill the "reservoir". An exchange cannot work adequately without liquidity pools. Because of that, the providers are paid an income - a percentage for each transaction in the pool.

A pool is always a trading Pair of some kind. For example, TON/TGR or TON/USDT. There are always only TWO cryptocurrencies in a liquidity pool.

If you want to become a provider for the pool, you have to put both cryptocurrencies into the "pool", most often in a 50/50 ratio, but sometimes there are other proportions.

Being in a pool, you will receive income from all exchanges between the two selected coins.

To summarize, the liquidity pool is an interesting tool with which crypto owners can generate income.

Did it become clearer after reading about the structure of the pool?