Welcome to Craft World! You've just unlocked the 'Pools' feature, but you might still be wondering: "How does it actually work?"

That’s a great question! To get the most out of the in-game Pools feature, it’s helpful to understand the concept of Liquidity Pools (LPs) and how they function.

Summary

In simple terms, LPs are a tool used in web3 that enables the exchange of two assets on their supply and demand. They differ from the more traditional Order Book method of trading, which, while effective, comes with certain limitations.

• Constant Market Availability: Unlike order books, which rely on matching buyers and sellers, LPs always have liquidity available to trade with, as long as the pool is funded.
• No Counterparty Dependency: With LPs, you’re trading directly with the pool itself, removing the need to wait for someone to take the other side of your trade.
• Automated Market Making: LPs leverage algorithms to determine prices, making the process smoother and more efficient.

Below is an in-depth explanation of all the intricacies of how Liquidity Pools work, followed by an explanation of how the in-game Pools feature works and how you can use it to your advantage.

You can check recent data of the pools used in-game’s liquidity here.

And you can check recent data of the trades executed via said pools here.

Liquidity Pools

Craft World Pools