#Liquidity101 #Liquidity101 Liquidity in crypto refers to how easily you can buy or sell an asset without affecting its price too much. High liquidity means there are many buyers and sellers, so transactions happen quickly and with minimal slippage. Low liquidity can lead to price volatility and difficulty in executing trades.

Centralized exchanges (CEXs) usually offer better liquidity than decentralized exchanges (DEXs), especially for popular tokens. Liquidity is important because it ensures a smoother trading experience and allows users to enter or exit positions with confidence.

Projects often use liquidity pools (especially in DeFi) to support trading pairs, and rewards are given to liquidity providers as incentives. As a trader or investor, always check liquidity before trading—poor liquidity can lead to big losses from slippage!