Would such a thing be possible? I know a lot of exchanges have holdings in each other's wallets. For example, Bittrex could have a store of LINK on Kucoin.
Wouldn't it make sense for centralized exchanges to utilize staking pools to increase their liquidity?
I'm a novice at understanding these technologies so I might be off here in terms of the viability of such a transaction.
It is possible, but liquidity provider takes currency risk on his arms. The main condition for the delivery of a stable, safe trading platform is to stay as far as it is possible from unnecessary risks. CEX takes fee from others taking a risk trading on CEX and it can also take fee from others taking a risk from providing liquidity in liquidity pools - binance already launched it's own swap service that allow users to provide liquidity -https://cointelegraph.com/news/binance-takes-on-defi-with-uniswap-competitor-and-liquidity-mining