# Liquidity Pool

For a coin pair, a liquidity pool can be created by anyone in Crescent DEX, where the liquidity pool is to reserve the amount of two different coins of the coin pair.

Liquidity pool (LP) for a coin pair and LP providers

Users can deposit a pair of coins into the pool so that those users become liquidity providers. A liquidity provider can be anyone who provides liquidity by depositing reserve coins into the pool.

In Crescent DEX, a liquidity pool takes a role of automated market maker (AMM) by utilizing CPM (Constant Product Model) to calculate available liquidity.

The pool price is defined as the ratio of the number of the quote coins and the number of the base coins in the pool. For the coin pair

`A-B`

, the pool price is the number of coin `B`

divided by the number of coin `A`

in the pool.Crescent DEX will support multiple liquidity pools for a given coin pair with introducing later ranged pools.

Last modified 1yr ago