#CryptoFees101

Why Liquidity Matters in Crypto

Liquidity measures how easily an asset can be bought or sold without affecting its price. High liquidity (e.g., Bitcoin or ETH pairs) means tight spreads and faster executions, reducing trading costs. Low liquidity assets often have wider spreads and slippage, making trades riskier. Centralized exchanges (CEXs) typically offer better liquidity than DEXs due to higher trading volumes. Liquidity providers (LPs) earn fees by supplying assets to pools, stabilizing markets. For traders, checking liquidity before entering a trade is crucial—illiquid markets can lead to unexpected losses. Prioritize liquid pairs for smoother, more predictable trading experiences. #Liquidity101