Traditionally, the fundamental building block of electronic trading involves the order book and matching engine. This model is great for facilitating efficient exchange and allows the creation of sophisticated financial markets. However, when decentralized exchanges (DEXs) implemented the same peer-to-peer model on the Ethereum blockchain, each interaction with the order book requires gas fees, making it expensive and unsustainable to execute trades. During the DeFi summer of 2020, the breakthrough of the peer-to-contract system design, which is utilized by leading protocols like Uniswap and Compound, incentivizes the pooling of funds into a smart contract. Thus there isn't a seller on the other side in the traditional sense, instead, the user is executing trades against the liquidity in the pooled smart contract. This not only creates a much more efficient on-chain spot trading system but also establishes the potential for many other financial experiments, such as yield farming, synthetic assets, insurance, etc. In addition, when funds are pooled together, pooling participants are more incentivized to vote together on a common cause that they deem important by using the platform's governance token.