What is a liquidity pool?

A liquidity pool is a collection of a pair of cryptocurrencies, like ELF/USDT, locked in a smart contract on a blockchain network. Similar to a market maker in a centralized exchange, liquidity pools facilitate trading by providing market liquidity and depth for users to trade crypto tokens. It also connects buyers and sellers in real-time as liquidity pools remove the need of an order book or a centralized entity to match buyers and sellers.