> For the complete documentation index, see [llms.txt](https://docs.skydrome.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.skydrome.finance/features/liquidity-pools.md).

# Liquidity Pools

<figure><img src="/files/1Wx43vNvGoAG8bbW2AGl" alt=""><figcaption><p>Skydrome Swap Interface</p></figcaption></figure>

At its essence, Skydrome empowers users to exchange digital assets securely, benefiting from minimal fees and reduced slippage. Slippage refers to the gap between an asset's prevailing market value and the rate at which the trade materializes. Such discrepancies might lead to either a slightly higher cost (yielding fewer tokens) or a lesser cost (yielding more tokens) from a transaction. For optimal market rates, we've categorized assets into:

* Correlated assets - think of stable coins like $USDC, $USDT, and so on.
* Uncorrelated assets - such as $ETH and $SKY.

Skydrome presents two tailored liquidity pools to cater to specific token pairing requirements: Stable Pools and Variable Pools. Our protocol's routing mechanism assesses both pool categories to pinpoint the most cost-effective quotation and trading pathway. To safeguard against abrupt flashloan breaches, the router employs 30-minute TWAPs (time-weighted average prices). Furthermore, this router is self-reliant, needing no external intervention. A pool's liquidity depth (or higher value secured) is inversely proportional to its slippage, meaning deeper liquidity leads to lower slippage.


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