> For the complete documentation index, see [llms.txt](https://docs.alcor.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.alcor.exchange/faq/what-is-a-liquidity-pool.md).

# What is a liquidity Pool?

Liquidity pools provide liquidity in decentralized exchanges rather than relying on order books. 

The advantage of using liquidity pools is that it does not require a buyer and a seller to decide to exchange two assets for a given price, and instead leverages a pre-funded liquidity pool. This allows for trades to happen with limited slippage even for the most illiquid trading pairs, as long as there is a big enough liquidity pool.