Glossary

Liquidity Pool

A collection of digital assets locked in a smart contract used to facilitate decentralized trading or lending.

What is Liquidity Pool?

A collection of digital assets locked in a smart contract used to facilitate decentralized trading or lending. Instead of relying on DeFi liquidity pools across multiple chains, Lygos Finance uses institutional capital to fund $25K–$100M loans secured by Bitcoin DLCs.

Full Definition

Liquidity pools are the backbone of Automated Market Makers (AMMs) and DeFi lending protocols. Users, called liquidity providers, deposit their assets into these pools to provide the capital necessary for others to trade or borrow against. In return for providing this capital, they earn a share of the transaction fees generated by the pool.

How Lygos Uses This

Instead of relying on DeFi liquidity pools across multiple chains, Lygos Finance uses institutional capital to fund $25K–$100M loans secured by Bitcoin DLCs.

Why this matters for borrowers

Understanding Liquidity Pool provides context for how Bitcoin lending fits into the broader financial ecosystem. DeFi concepts are reshaping how people think about borrowing and lending.

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