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Copy file name to clipboardExpand all lines: docs/build/smart-contracts/example-contracts/liquidity-pool.mdx
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Implementing a liquidity pool contract should be done cautiously. User funds are involved, so great care should be taken to ensure safety and transparency. The example here should _not_ be considered a ready-to-go contract. Please use it as a reference only.
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The Stellar network already has liquidity pool functionality built right in to the core protocol. [Learn more here](../../../learn/encyclopedia/sdex/liquidity-on-stellar-sdex-liquidity-pools.mdx).
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The Stellar network already has liquidity pool functionality built right in to the core protocol. [Learn more here](../../../learn/fundamentals/liquidity-on-stellar-sdex-liquidity-pools.mdx).
Copy file name to clipboardExpand all lines: docs/data/indexers/build-your-own/ingest-sdk/README.mdx
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Ledger entries are cryptographically signed as part of each ledger and therefore represent the trusted, cumulative state at a point in time for [assets](../../../../learn/fundamentals/stellar-data-structures/assets.mdx) related to an [account](../../../../learn/fundamentals/stellar-data-structures/accounts.mdx) or [contract](../../../../learn/fundamentals/contract-development/storage/persisting-data.mdx). Examples of asset types:
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- trustlines which hold token balances
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- offers which hold bid and asks on the [stellar network DEX](../../../../learn/encyclopedia/sdex/liquidity-on-stellar-sdex-liquidity-pools.mdx#sdex)
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- offers which hold bid and asks on the [stellar network DEX](../../../../learn/fundamentals/liquidity-on-stellar-sdex-liquidity-pools.mdx#sdex)
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- contract data which holds key/value stores for contracts
Copy file name to clipboardExpand all lines: docs/learn/encyclopedia/transactions-specialized/path-payments.mdx
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It is possible for path payments to fail if there are no viable exchange paths.
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For more information on the Stellar Decentralized Exchange and Liquidity Pools, see our [Liquidity on Stellar: SDEX and Liquidity Pools Encyclopedia Entry](../sdex/liquidity-on-stellar-sdex-liquidity-pools.mdx)
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For more information on the Stellar Decentralized Exchange and Liquidity Pools, see our [Liquidity on Stellar: SDEX and Liquidity Pools Encyclopedia Entry](../../fundamentals/liquidity-on-stellar-sdex-liquidity-pools.mdx).
Copy file name to clipboardExpand all lines: docs/learn/fundamentals/liquidity-on-stellar-sdex-liquidity-pools.mdx
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---
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title: "Liquidity Pools on the Stellar DEX: Provide Liquidity and Enable Asset Swaps"
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sidebar_label: "Liquidity on Stellar: SDEX and Liquidity Pools"
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sidebar_label: "SDEX"
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description: "Learn how liquidity pools enable trading on the Stellar DEX. Understand how they work, provide liquidity, and enable decentralized asset swaps on the network."
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sidebar_position: 100
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---
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# Liquidity on Stellar: SDEX & Liquidity Pools
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Users can trade and convert assets on the Stellar network with the use of path payments through Stellar’s decentralized exchange and liquidity pools.
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In this section, we will talk about the SDEX and liquidity pools. To learn about how these work together to execute transactions, see our [Path Payments Encyclopedia Entry](../transactions-specialized/path-payments.mdx).
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In this section, we will talk about the SDEX and liquidity pools. To learn about how these work together to execute transactions, see our [Path Payments Encyclopedia Entry](../encyclopedia/transactions-specialized/path-payments.mdx).
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## SDEX
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The Stellar network acts as a decentralized distributed exchange that allows users to trade and convert assets with the [Manage Buy Offer](../../../data/apis/horizon/api-reference/resources/operations/object/buy-offer.mdx) and [Manage Sell Offer](../../../data/apis/horizon/api-reference/resources/operations/object/sell-offer.mdx) operations. The Stellar ledger stores both the balances held by user accounts and orders that user accounts make to buy or sell assets.
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The Stellar network acts as a decentralized distributed exchange that allows users to trade and convert assets with the [Manage Buy Offer](../../data/apis/horizon/api-reference/resources/operations/object/buy-offer.mdx) and [Manage Sell Offer](../../data/apis/horizon/api-reference/resources/operations/object/sell-offer.mdx) operations. The Stellar ledger stores both the balances held by user accounts and orders that user accounts make to buy or sell assets.
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### Order books
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The order price you set is independent of the fee you pay for submitting that order in a transaction. Fees are always paid in XLM, and you specify them as a separate parameter when submitting the order to the network.
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To learn more about transaction fees, see our section on [Fees section](../../fundamentals/fees-resource-limits-metering.mdx).
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To learn more about transaction fees, see our section on [Fees section](./fees-resource-limits-metering.mdx).
Copy file name to clipboardExpand all lines: docs/learn/fundamentals/transactions/list-of-operations.mdx
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Creates, updates, or deletes an offer to buy a specific amount of an asset for another
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Learn more about passive sell offers: [Liquidity on Stellar: SDEX and Liquidity Pools](../../encyclopedia/sdex/liquidity-on-stellar-sdex-liquidity-pools.mdx)
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Learn more about passive sell offers: [Liquidity on Stellar: SDEX and Liquidity Pools](../liquidity-on-stellar-sdex-liquidity-pools.mdx)
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Creates, updates, or deletes an offer to sell a specific amount of an asset for another
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Learn more about passive sell offers: [Liquidity on Stellar: SDEX and Liquidity Pools](../../encyclopedia/sdex/liquidity-on-stellar-sdex-liquidity-pools.mdx)
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Learn more about passive sell offers: [Liquidity on Stellar: SDEX and Liquidity Pools](../liquidity-on-stellar-sdex-liquidity-pools.mdx)
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Creates an offer to sell one asset for another without taking a reverse offer of equal price
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Learn more about passive sell offers: [Liquidity on Stellar: SDEX and Liquidity Pools](../../encyclopedia/sdex/liquidity-on-stellar-sdex-liquidity-pools.mdx)
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Learn more about passive sell offers: [Liquidity on Stellar: SDEX and Liquidity Pools](../liquidity-on-stellar-sdex-liquidity-pools.mdx)
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If the pool is empty, then this operation deposits maxAmountA of A and maxAmountB of B into the pool. If the pool is not empty, then this operation deposits at most maxAmountA of A and maxAmountB of B into the pool. The actual amounts deposited are determined using the current reserves of the pool. You can use these parameters to control a percentage of slippage.
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Learn more about liquidity pools: [Liquidity Pools Encyclopedia Entry](../../encyclopedia/sdex/liquidity-on-stellar-sdex-liquidity-pools.mdx)
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Learn more about liquidity pools: [Liquidity Pools section](../liquidity-on-stellar-sdex-liquidity-pools.mdx)
Copy file name to clipboardExpand all lines: docs/learn/glossary.mdx
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A distributed exchange that allows the trading and conversion of assets on the network.
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Learn more in our [Liquidity on Stellar](./encyclopedia/sdex/liquidity-on-stellar-sdex-liquidity-pools.mdx#sdex)Encyclopedia Entry.
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Learn more in our [Liquidity on Stellar](./fundamentals/liquidity-on-stellar-sdex-liquidity-pools.mdx#sdex)section.
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### External Data Representation (XDR)
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An offer to buy or sell an asset.
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Learn more in our [Liquidity on Stellar: SDEX and Liquidity Pools Encyclopedia Entry](./encyclopedia/sdex/liquidity-on-stellar-sdex-liquidity-pools.mdx#orders).
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Learn more in our [Liquidity on Stellar: SDEX and Liquidity Pools section](./fundamentals/liquidity-on-stellar-sdex-liquidity-pools.mdx#orders).
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### Orderbook
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A record of outstanding orders on the Stellar network.
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Learn more in our [Liquidity on Stellar: SDEX and Liquidity Pools Encyclopedia Entry](./encyclopedia/sdex/liquidity-on-stellar-sdex-liquidity-pools.mdx#order-books).
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Learn more in our [Liquidity on Stellar: SDEX and Liquidity Pools section](./fundamentals/liquidity-on-stellar-sdex-liquidity-pools.mdx#order-books).
Copy file name to clipboardExpand all lines: docs/tokens/control-asset-access.mdx
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One thing you must decide when issuing an asset is what to call it. An asset code is the asset’s identifying code. There are three possible formats: Alphanumeric 4, Alphanumeric 12, and liquidity pool shares.
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Learn about liquidity pool shares in the [Liquidity Pool Encyclopedia Entry](../learn/encyclopedia/sdex/liquidity-on-stellar-sdex-liquidity-pools.mdx).
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Learn about liquidity pool shares in the [Liquidity Pool Encyclopedia Entry](../learn/fundamentals/liquidity-on-stellar-sdex-liquidity-pools.mdx).
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- Alphanumeric 4-character maximum: Any characters from the set a-z, A-Z, 0-9 are allowed. The code can be shorter than 4 characters, but the trailing characters must all be empty.
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- Alphanumeric 12-character maximum: Any characters from the set a-z, A-Z, 0-9 are allowed. The code can be any number of characters from 5 to 12, but the trailing characters must all be empty.
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