**💧 Crypto #Liquidity Simplified**
1. **What is Liquidity?**
- How easily you can trade crypto without moving its price.
- 🟢 **High Liquidity** = Fast trades, stable prices
- 🔴 **Low Liquidity** = Slippage, price swings
2. **Why It Matters**
- Smooth trading
- Accurate pricing
- Lower fees (tight spreads)
- Faster orders
3. **What Affects Liquidity?**
- Trading volume
- Exchange & token popularity
- Market depth
4. **Liquidity Pools (DeFi)** 🧪
- Users lock tokens in pools (e.g., Uniswap) to enable trading.
- **LPs earn fees/tokens** for providing liquidity.
5. **Slippage** 🚨
- Price difference between expected and actual trade.
- Common in low-liquidity or large trades.
6. **CEX vs. DEX**
- **CEX (Binance, Coinbase)**: High liquidity, order books.
- **DEX (Uniswap)**: Relies on liquidity pools.
7. **How to Check?**
- Look at trading volume, order book depth, or pool TVL (DeFi).
