# Pool and farm

Liquidity pools represent a groundbreaking idea that emerged within the DeFi ecosystem and have since become a fundamental aspect of crypto world. These pools play a crucial role in facilitating Automated Market Makers (AMMs), like Uniswap V2, to establish highly fluid markets for various assets, facilitating seamless trading without relying on a counterparty or conventional order book found in traditional finance.

Liquidity pools operate by holding a specific quantity of particular assets, designated by the pool's pair, which remain available for trading at any given moment. Each time a user conducts a swap using that pair, a slight and flexible fee is imposed. Individuals can choose to lend their idle assets to a liquidity pool and, in return, become what is referred to as a Liquidity Provider, or LP. Conceptually, this act of providing liquidity closely resembles someone making a bank deposit in the physical world and earning interest (fees) on their deposited funds.

On the MantaDEX platform, we encourage users to provide more liquidity through the farm mechanism. Users can choose to stake the LP tokens they receive as Liquidity Providers and start mining MANDEX tokens. The release of MANDEX tokens is divided into two stages. The first stage, known as the First-Mine-Reward Period, has a much faster token acquisition rate compared to the Full Launch Period. So, seize the opportunity to maximize your rewards.

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**TIP**

If you don't stake your LP tokens in farming, you still provide liquidity and will receive your LP trade fee reward when you withdraw. However, we strongly recommend staking your LP tokens as it enables you to earn more rewards without any additional costs.
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Below is an swapping example:
