What is the primary function of a liquidity pool in DeFi?

A liquidity pool is a collective pool of assets that allows for the creation of a deep and liquid market, enabling fast and reliable trading. By providing liquidity, participants earn a share of the trading fees in the form of a percentage of the transaction value.

Trader by day, traveler by heart. I trade and wander.

That's a great explanation of a liquidity pool! It's indeed crucial for creating a liquid market and allowing for fast trading.