Liquidity pools represent the so-called Automated Market Making (AMM). In other words, liquidity pools are an automated algorithm designed to ensure continuous liquidity and maintain a fair market price in cryptocurrency markets. Liquidity pools aim to address the issue of illiquid markets by encouraging users themselves to provide liquidity in exchange for a share of trading fees.

Liquidity pools on Mubadil function similarly to decentralized liquidity pools such as Uniswap and similar platforms. The only difference is that our pools are centralized, meaning we use a server-based mechanism instead of smart contracts.

Since the liquidity pools on Mubadil are centralized, pools can be created with pairs of any coins listed on Mubadil. Additionally, no fees are charged to users for creating, adding, or withdrawing liquidity from the pools.

Liquidity pools on Mubadil operate based on the constant product liquidity formula known as x * y = k. In this formula, (x) represents the primary liquidity, (y) represents the secondary liquidity, and the product of x and y (k) represents the constant product of liquidity, which remains constant for each liquidity provider.

During trades in the pool, the price is automatically adjusted according to the formula mentioned above. The initial price for buying or selling in the pool is the ratio of primary liquidity (x) to secondary liquidity (y). However, the final transaction price will vary depending on the transaction volume: as the buying volume increases, the price will increase, and as the selling volume increases, the price will decrease.

Earning with Mubadil liquidity pools is straightforward. All that is required from the user is to become a liquidity provider by simply adding liquidity to the pool. Subsequently, for each trading operation in the pool, the user will automatically earn a share of the trading fees on the provided liquidity, proportional to their stake in the pool.

Liquidity can be added and withdrawn without any restrictions on all available pools. Additionally, users can create their own pools with pairs of any coins listed on Mubadil.