Liquidity pool
A liquidity pool is a pair of tokens locked in a smart contract that a decentralized exchange (DEX) trades against instead of an order book. A formula sets the price from how much of each token is in the pool.
In the simplest pools (constant product, as on Uniswap v2) the two balances multiplied together stay constant. When you buy one token you add the other, so every unit you buy costs a little more than the last. The deeper the pool, the less a trade moves the price.
Learn more: what slippage is.