💧 Liquidity 101 – What You Should Know
Liquidity = how easily you can turn an asset into cash without losing value.
⸻
🏦 Simple examples:
• 💵 Cash = super liquid
• 📈 Stocks = pretty liquid
• 🏠 Real estate or NFTs = not very liquid
⸻
Why it matters:
• You can exit investments fast
• Prices are more stable in liquid markets
• High liquidity = more trust = more investors
⸻
💻 In DeFi?
Liquidity is provided by users (LPs) who lock tokens in pools. They earn trading fees — but watch out for impermanent loss!
⸻
👀 Quick tips:
• Always check if an asset is liquid before investing
• Illiquid = hard to sell = risk of being stuck
• In crypto, look at TVL (Total Value Locked)
⸻
Liquidity keeps markets alive.
Understand it, and you’re one step ahead.
