#Liquidity101 Liquidity: or Why Your Trade Can Sink Like a Stone in the Mud
Imagine you decided to buy 1000 tokens in a decentralized desert with 12 traders and a market maker who stepped out for lunch. You hit “Buy,” and… bam! You bought at 20% higher. Congratulations! You just became a victim of liquidity with a minimum 😅
📌 What is liquidity?
It’s not water, though it sounds similar. Liquidity is the ability of an asset to be quickly bought and sold without significantly impacting the price. You might have a top altcoin, but if there’s no demand for it — it’s just a precious deadweight in your wallet 🧟♂️
📉 Slippage — the invisible thief
When there are few participants in the market or low volume — you enter a trade at one price and get a completely different one. And, as always, worse. It’s especially fun on DEXs, where the “liquidity pool” is not a pool, but a puddle after the rain ☔
🧐 How to assess liquidity?
· Check trading volumes and the spread between buy/sell prices
