A liquidity pool is like a pond

or container where cryptocurrencies stay, and hang around!

A 2 piece container where you have an equal ammount of tokens on each side.

Equal in value,

For example same

$USDT value.

They are managed by DEX smart contracts!

And during a swap!

The required amount of Token "A" is taken from one side, and the amount of tokens given by the trader: Token "B", are set on the other side.

The tokens are always available in the liquidity pool so users do not need to wait for someone with the required amount of tokens. But liquidity providers provides them and get a % of each transaction in the pool.