#Liquidity101

* **Slippage:**

The difference between the expected price and the actual price when executing the trade due to low liquidity.

* **Impermanent Loss:**

A temporary loss incurred by a liquidity provider if the prices of the tokens change while they are in the pool.

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### 🧪 Simple Example

You want to swap **$1000 of Token A** for **Token B** on a decentralized platform:

* If liquidity is **high**: The trade executes quickly and at a price close to the market.

* If liquidity is **low**: You receive fewer Token B due to slippage.

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### 📝 Summary #Liquidity101:

* Liquidity = *Ease and effectiveness of trading*

* High liquidity = *Lower risks and better prices*

* DeFi relies on **liquidity pools from users**

* Before you trade or invest: **Check**