How did liquidity pools emerge?

Liquidity pools became an essential element in the decentralized finance (DeFi) ecosystem. The idea of pools originated from the need to improve liquidity on decentralized exchanges. Previously, on centralized platforms, liquidity was provided through order books, but such a structure was absent in DeFi platforms. Liquidity pools solved this problem by allowing users to automatically exchange tokens without third-party involvement. In return for providing liquidity, users receive transaction fees, which encourage their participation. Thus, liquidity pools enabled more efficient and accessible asset exchange.