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  • About Bancor Network
    • Bancor V3
    • Bancor Basics
      • About Bancor
      • What Can I Do With Bancor?
      • Liquidity Pools
      • Single-Side Liquidity
      • Why Use Bancor?
      • Resources
    • Resources for DAOs
      • Token Whitelisting Requirements
      • Liquidity Mining
        • Auto Compounding Rewards
          • How Auto Compounding Rewards work
          • How to Create an Auto Compounding Rewards Program
          • Custom Rewards Programs
        • Dual Liquidity Mining
        • Standard (External) Rewards
    • Security & Audits
      • Multisig Rights
      • Oracles
      • DAO MSIG Intervention Policy
  • Contracts & Functions
    • Contracts
    • Write Functions
      • Transaction Prerequisites
        • approve() / allowance()
      • Trading
        • tradeBySourceAmount()
        • tradeByTargetAmount()
        • Trading Troubleshooting
      • Adding Liquidity
        • deposit()
        • depositFor()
        • Deposit Troubleshooting
        • depositAndJoin()
      • Removing Liquidity
        • Initiating Cooldown
          • initWithdrawal()
        • withdraw()
        • cancelWithdrawal()
        • Withdraw Troubleshooting
      • Flashloan
        • flashLoan()
        • Flashloan Troubleshooting
      • Migrating Liquidity to v3
        • Migrating Bancor positions to v3
          • migratePositions()
          • migratePoolTokens()
          • Errors and Troubleshooting
        • Migrating from Uniswap v2
          • migrateUniswapV2Position()
        • Migrating from Sushiswap
          • migrateSushiSwapV1Position()
      • Rewards
        • join()
        • stakeRewards()
        • autoProcessRewards()
        • claimRewards()
        • leave()
      • Surplus migration
        • withdrawPOL()
      • Network Fees
        • burnNetworkFees()
    • Read Functions
      • Rewards
        • Standard rewards
          • Identify if a program exists
            • Auto Compounding
            • Standard Rewards
          • programIds()
          • programs()
          • providerProgramIds()
          • pendingRewards()
          • latestProgramId()
          • isProgramActive()
          • isProgramEnabled()
          • providerStake()
          • programStake()
          • providerRewards()
        • Auto compounding rewards
          • bnToken balance
          • isProgramActive()
          • isProgramPaused()
          • pools()
          • program()
          • programs()
      • Liquidity Pool Details
        • liquidityPools()
        • isPoolValid()
        • isPoolStable()
        • tradingLiquidity()
        • depositingEnabled()
        • poolFundingLimit()
      • Trades
        • tradeOutputBySourceAmount()
        • tradeInputByTargetAmount()
        • tradingEnabled()
        • tradingFeePMM()
      • Withdrawals
        • isReadyForWithdrawal()
        • withdrawalRequest()
        • withdrawalAmounts()
        • withdrawalRequestIds()
        • withdrawalRequestCount()
        • lockDuration()
      • Pool Token Information
        • poolToken()
        • collectionByPool()
        • poolTokenToUnderlying()
        • underlyingToPoolToken()
      • Vortex
        • pendingNetworkFeeAmount()
        • minNetworkFeeBurn()
      • Surplus whitelist
        • protectedTokenWhitelist()
    • Data & Events
      • General Data
        • contextId
      • Trading Data
        • event TokensTraded()
      • Liquidity Data
        • TotalLiquidityUpdated()
        • TradingLiquidityUpdated()
        • TokensDeposited()
        • TokensWithdrawn()
        • WithdrawalInitiated()
        • WithdrawalCancelled()
        • WithdrawalCompleted()
        • LockDurationUpdated()
        • Cross AMM Migration Data
          • UniswapV2PositionMigrated()
          • SushiswapV1PositionMigrated()
      • Flashloan Data
        • FlashLoanCompleted()
        • FlashLoanFeePPMUpdated()
      • Rewards
        • Staking and Unstaking
          • Event ProviderJoined()
          • Event ProviderLeft()
        • Claiming and Restaking Rewards
          • Event RewardsClaimed()
          • Event RewardsStaked()
  • Developer Guides
    • Bancor Vortex Burner
    • Bancor Etherscan Guide
      • Etherscan Basics
      • Deposit
      • Deposit and Join
      • Rewards: Joining Standard Rewards
      • Rewards: Stake & Claim
      • Rewards: Leaving the Rewards Contract
      • Withdrawing Tokens
        • Initiating the Withdrawal
        • Completing the Withdrawal
      • Migrating V2.1 Positions
      • Rewards: Auto Compounding Rewards Distribution
    • REST API
      • API Reference
      • DLT Identifier
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  1. About Bancor Network
  2. Bancor Basics

Liquidity Pools

Liquidity pools are automated market maker (AMM) smart contracts that exchange assets algorithmically using on-chain reserves.

Liquidity on traditional asset exchanges has historically been provided by a small handful of professional trading firms with permissioned access and specialized tools. This concentrates liquidity in the hands of a few actors who can withdraw and manipulate assets during periods of volatility and restrict trading when users need it the most.

In contrast, AMM pools allow liquidity to flow from an unlimited number of everyday users, lowering the barrier to token creation and yield generation, and increasing resistance to market manipulation and censorship.

Launched in June 2017, Bancor created the first-ever network of AMMs on the blockchain. Since then, AMM liquidity pools have evolved into a core building block of decentralized finance (DeFi), attracting over $30 billion in locked value across numerous blockchains.

PreviousWhat Can I Do With Bancor?NextSingle-Side Liquidity

Last updated 3 years ago