L-DEX is the decentralized exchange of the LFi ecosystem. Unlike centralized exchanges, which use third-party intermediaries like market makers to facilitate trading between tokens, decentralized exchanges use smart contracts to coordinate trades between users. This allows for permission-less and anonymous trading free of the constraints of centralized exchanges.
In a decentralized exchange like L-DEX, all liquidity is added by users and partner projects. To incentivize deeper liquidity, a decentralized exchange can offer reward tokens to liquidity providers, as well as a share of trading fees earned from trades from a token pair. A token cannot be traded for another token on the L-DEX unless there is ample liquidity depth in the exchange for that token pair.