What is Liquidity?
The ease of buying or selling an asset without moving the price. In crypto, liquidity pools (not order books) power most trading. For token projects, insufficient liquidity means your token is effectively useless regardless of how good the tech is.
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In plain words
"A deep pool — the more water, the easier it is to swim without moving the surface. Shallow pools mean big splashes (price impact)."
How it works
Liquidity = Depth × Speed
Key takeaways
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Depth determines how easily you can trade
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Low liquidity = high price impact
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Provided by LPs who earn trading fees
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Real-world example
A token with $10M liquidity: you can sell $50K without moving the price. A token with $50K liquidity: your $5K sell drops it 20%.
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