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The liquidity pool is essentially a smart contract that autonomously facilitates these trades. It stipulates that if a trader deposits one asset (ETH), they can withdraw another (BTC), effectively enabling trades without the need for a traditional order book.
Finally, we have the liquidity providers. These individuals contribute two different assets (e.g., ETH and BTC) into the liquidity pool, taking on the other side of the trade. When a trader executes a transaction, liquidity providers receive a portion of the fees generated during this process, which are typically paid out in tokens related to the pool.