# Liquidity Pools A **Liquidity Pool** for a [Decentralized Exchange](/glossary/definitions/decentralized-exchanges.md) (DEX) is a pool of funds provided by users of the DEX that is used to facilitate trading. When a user wants to trade a particular asset, they can do so by providing some of their own assets to the liquidity pool. This helps to ensure that there is always sufficient liquidity on the DEX to match buy and sell orders. The exact formula used to determine the prices of assets being traded on a DEX liquidity pool will depend on the specific DEX and the algorithms it uses. However, most DEXs use some variant of the [Constant Product Market Maker](/glossary/definitions/decentralized-exchanges/cpmm-formula.md) (CPMM) formula, which is a type of algorithm that sets prices based on the supply and demand of the assets being traded. DEX liquidity pools play a crucial role in enabling efficient and trustless trading on decentralized exchanges. By providing liquidity to the pool, users can help to ensure that there are always sufficient funds available to match buy and sell orders, which in turn helps to keep prices stable and facilitate efficient trading on the DEX. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.allforone.app/glossary/definitions/decentralized-exchanges/liquidity-pools.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.