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Water can serve two major benefits when baking.

First, as an ingredient, it can change the way the ingredients work together. For example, it is important in bread as it is a primary tool in forming gluten when combined with the flour which yields a specific mouth feel/texture to the bread once it has been baked.

Secondly, it can be used to help control the climate of the oven while something is baking. For example, when baking a custard, using a "water bath" (that is putting the baking dish inside a larger dish with water inside that larger dish) can help reduce the risk of the custard drying out while it is being baked.

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