馃強 DeFi Pools: Stake Tokens, Earn Rewards, Boost Liquidity

馃強 What pools actually do

By SquadSwap
Feb 12, 2026, 3:29 PM
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What Are DeFi Pools?

Pools are DeFi systems that let users stake one cryptocurrency to earn a different token.​ They serve two main purposes:

  • Increase liquidity for trading pairs
  • Boost visibility and accessibility for tokens

How They Work

Users deposit tokens into smart contracts and become liquidity providers (LPs).​ In return, they receive LP tokens representing their pool share and earn transaction fees proportional to their contribution.​

Key Benefits

  • Passive Income: Earn fees from trades in the pool
  • Capital Efficiency: Put idle assets to work
  • 24/7 Trading: Enable permissionless, decentralized trading
  • Composability: Use LP tokens across DeFi protocols

Pools form the backbone of decentralized exchanges, allowing continuous trading without centralized intermediaries or order books.​

Sources
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