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In Defi, what is "liquidity pooling"?


Options are:

1-        A method of combining different cryptocurrencies into one token

2-        The process of adding funds to a smart contract to facilitate trading and earn rewards

3-        A technique for increasing the liquidity of a specific token

4-        The act of withdrawing all liquidity from a protocol


Correct Answer is:


The process of adding funds to a smart contract to facilitate trading and earn rewards.