What is a liquidity pool?.

Depth is the amount that can be traded before the price moves noticeably. In a pool holding a few tens of thousands of euros, a €10,000 order shifts the price sharply; in a pool holding tens of millions, the same order barely registers. That gap, price impact or slippage, is almost always the largest cost on bigger orders.

This is why a low fee means little without context. A pool charging 0.05% with thin depth can end up more expensive than a 0.30% pool with deep reserves.

Pools are funded by liquidity providers: users or professional firms depositing two assets in proportion. In return they earn a share of the trading fees the pool collects, pro rata to their deposit. As long as volume exists, that produces a yield.

At Block #9, liquidity in the core markets Bitcoin, Ethereum, XRP, Solana and stablecoins is deliberately kept deep, so user orders do not land in thin markets and execution stays predictable.

Providing liquidity means holding a shifting mix of two assets. If one rises sharply against the other, the pool sells part of the riser along the way. The result can be worth less than simply holding both assets. That difference is called impermanent loss.

The loss only becomes real when you withdraw and may be offset partly or fully by earned fees. For assets that move together, such as two stablecoins, the effect is small; for a volatile pair it can be substantial.

A large order does not have to land in a single pool. Routing splits it across several pools and networks, so each slice hits a relatively deep market. The average price stays closer to the market price than a single large order would.

Splitting does add network fees per slice. For small amounts that outweighs the saving; for large amounts it almost never does.