#Liquidity101 Liquidity is the lifeblood of crypto markets! It determines how easily you can buy or sell assets without drastically affecting the price. High liquidity means tight spreads and fast executions—ideal for traders. Low liquidity? Prepare for slippage and volatility.
**Why does it matter?**
- **Traders**: Better prices, faster trades, and lower costs.
- **Projects**: Healthy liquidity attracts more investors and builds trust.
- **DeFi**: Pool liquidity directly impacts yields and protocol stability.
CEXs like Binance dominate liquidity, but DEXs are catching up with innovative AMM models. Pro tip: Always check trading volume and order book depth before entering a trade!
How do you evaluate liquidity? Share your strategies below!
