The term “underlying pool” refers to a collection of assets that back or support a specific financial instrument or protocol. In the context of crypto, this usually means the actual assets or tokens that provide value to derivative products, tokenized assets, or liquidity protocols.For example, in a decentralized finance (DeFi) application, an underlying pool might consist of various cryptocurrencies locked into a smart contract. This pool serves as the source of liquidity for trading, lending, or borrowing activities. Users might deposit their assets into this pool and earn rewards, like interest or fees, in return.In the case of mortgage-backed tokens or similar assets, the underlying pool would be the real-world loans or mortgages that underpin the tokenized version. This ensures that the token’s value is supported by tangible assets, creating a level of security for investors.Overall, the underlying pool is essential for maintaining the stability, trust, and functionality of various financial products in the crypto space.