#Liquidity101

Without liquidity, no one can sell or buy a crypto, regardless of whether it is a CEX or DEX exchange.

What is liquidity: it is the ease with which a crypto asset can be exchanged quickly and without a significant change in price...

⁉️ Where does this liquidity come from???

On DEXs, liquidity is locked in a liquidity pool; multiple people can put their tokens in the liquidity pool and receive rewards in return.

On CEXs, either the exchange itself provides the liquidity or market makers are there to create buy or sell orders continuously to maintain the spread between prices...

✅ Why is liquidity important??

📌 It helps avoid extreme volatility during exchanges.

📌 It attracts traders as they can easily buy and sell.

Liquidity is essential for being able to buy and sell. If you want to buy a project, especially new projects or on a DEX, you must always check the liquidity to avoid risking your money.

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