# What are LP Pools & IL Liquidity pools are stored crypto assets to make trading of major exchanges on DEX (decentralized exchanges) easier. Liquidity pools are reserves of tokens secured in smart contracts. * They provide liquidity in DEX, attempting to mitigate the problems caused by the illiquidity in such systems. * The convergence of orders, establishing price quotations (if reached) decide whether the asset will continue to surge or decline, are also referred to as liquidity pools. * The same DEX that uses crypto liquidity pools uses AMM (automated market maker) approach. Such exchange platforms have the feature to replace conventional order books with pre-funded on-chain liquidity pools for both assets of the trading pair. * For more information pools and impermenant loss.See these videos from Whiteboard Crypto. {% embed url="" %} {% embed url="" %} --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.vapordex.io/vapordex/liquidity-pools/overview-of-lp-pools/what-are-lp-pools-and-il.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.