# Why Pools?

Savmswap's unique approach does not involve an order book to set asset prices or match buyers and sellers. Instead, it utilizes Liquidity Pools.

Traditionally, liquidity is represented by individual orders on a centralized order book. Market participants need to actively manage their orders, continuously adjusting them in response to market activities.

While order books are a cornerstone of traditional finance and effective for certain scenarios, they have limitations, especially in decentralized or blockchain settings. Order books require intermediary infrastructure for hosting and matching orders, creating control points and added complexity. They also necessitate active involvement and sophisticated strategies from market makers, limiting access to advanced traders. In the burgeoning ecosystem of blockchain, where anyone can create a token, often with low liquidity, order books may not be the ideal solution.

Savmswap leverages the strengths of SatoshiVM to reimagine token swaps from fundamental principles.

A blockchain-native liquidity protocol should capitalize on the trusted execution environment, the autonomously running

virtual machine, and an open, permissionless, and inclusive access model. This environment fosters a rapidly expanding ecosystem of digital assets.

Pools in Savmswap are essentially smart contracts, operated by users executing functions. Swapping tokens involves calling the swap function on a Pool contract, while providing liquidity involves calling a deposit function.

Just as end-users interact with the Savmswap protocol through its user interface (which in turn interacts with underlying contracts), developers can directly engage with the smart contracts. This allows them to integrate Savmswap functionality into their applications without the need for intermediaries or permissions, fully harnessing the decentralized nature of the SatoshiVM blockchain.
