# Permissionless Liquidity Pool Creation

## Overview

Liquidity pools are pools of funds that are locked into a smart contract on a decentralized exchange (DEX). These funds are used to facilitate trades between different assets, without the need for an intermediary.

{% hint style="info" %}
Learn more about Liquidity Pools [here](https://guide.carbon.network/features/liquidity-pools).
{% endhint %}

Anyone can create liquidity pools for markets permissionlessly on [Demex](https://app.dem.exchange/).

Demex is a hybrid DEX that employs an [automated market maker (AMM)](https://guide.carbon.network/features/liquidity-pools/automated-market-maker-amm-model) and a [Central Limit Order Book (CLOB)](https://guide.carbon.network/features/decentralized-orderbooks). In order to enable trading, liquidity pools must be linked to their corresponding spot markets. On Demex, a liquidity pool is automatically linked to its corresponding spot market upon creation.

## Step-by-Step Guide

Creating a new pool on Demex is simple. Follow the steps outlined below.

**Step 1:** To get to the 'Create New Pool' feature, go to the [Pools](https://app.dem.exchange/pools) page on Demex and select the 'Create New Pool' option.

<figure><img src="https://3548599389-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MO-XZjWplLUJPNs07G8%2Fuploads%2FfC4tCzF0sAdCVI6nQoNO%2Fimage.png?alt=media&#x26;token=136513e9-0e49-4184-a51b-c268a8f05b6b" alt=""><figcaption></figcaption></figure>

**Step 2**: Select the two assets that you want to create a Liquidity Pool for.&#x20;

<figure><img src="https://3548599389-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MO-XZjWplLUJPNs07G8%2Fuploads%2FXlEXhAYcGX4wtA9F9X8j%2Fimage.png?alt=media&#x26;token=1cce4daf-3674-4b0e-bd16-c90838a7e9c5" alt=""><figcaption></figcaption></figure>

**Step 3**: Set pool weightage.

<figure><img src="https://3548599389-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MO-XZjWplLUJPNs07G8%2Fuploads%2F81nYmhHy4df3xokOUQU3%2Fimage.png?alt=media&#x26;token=09162cb8-c87f-41db-a219-66250b0975a9" alt=""><figcaption></figcaption></figure>

{% hint style="info" %}
**Example**\
For a 80% ETH / 20% SWTH liquidity pool, 80% of the total value locked in the liquidity pool is represented by ETH, while the remaining 20% is represented by SWTH. This ratio determines the price of each token in the pool, which is adjusted as trades are made.&#x20;

Learn more about Unequal Pool Weights [here](https://guide.carbon.network/features/liquidity-pools#unequal-pool-weights).&#x20;
{% endhint %}

**Step 4**: Deposit a proportionate value of both assets into the Liquidity Pool according to the pool weightage.

**Step 5:** Choose an amplification factor.

{% hint style="info" %}
Learn more about Amplified Pools [here](https://guide.carbon.network/features/liquidity-pools/amplified-pools).
{% endhint %}

**Step 6**: Ensure that the details shown match your desired Liquidity Pool information, then click on the 'Create' button.

**Step 7**: Liquidity Pool successfully created!

{% hint style="success" %}
That's it! Your token has been permissionlessly imported. You can now make a deposit using this token and [create a market ](https://guide.dem.exchange/~/changes/REiUq5w3vfdfOKEL0jdy/welcome/getting-started/advanced-guides/permissionless-market-creation)for it.
{% endhint %}