In the cryptocurrency market, liquidity is like the speed of traffic on the road: if liquidity is insufficient, it is like a traffic jam, where buy and sell orders cannot be executed quickly, leading to slippage risk. When liquidity is higher, the speed of capital inflow and outflow is faster, allowing investors to complete transactions at their desired prices, reducing impact. One way to increase liquidity is to encourage market makers and trading volume, which is like adding more lanes to the road, providing space for buy and sell orders to enter and exit, while also reducing transaction costs and enhancing market stability.