Liquidity pools are essential for the functioning of decentralized finance. Nevertheless, the legal issues they raise have found little attention in legal scholarship. In our talk, we will explain the way liquidity is provided in decentralized finance, as opposed to centralized finance, and introduces the relevant stakeholders (i.e., DEX operators, liquidity providers, and traders). Then, we will explain the legal relationships between such stakeholders from a contract law perspective. Further, we will discuss the options of users to seek compensation in case they incur damage in connection with the use of decentralized finance platforms. Finally, we will talk about the limitations of the existing legal framework and the need for legislative action.