Overview
Token liquidity is the ease of buying or selling a token without moving its price much. Deep liquidity reduces slippage and attracts traders. It is essential for token viability.
How It Works
Liquidity comes from trading pools, order books, and market makers. More liquidity means larger trades with less impact. Protocols incentivize liquidity to attract users.
Why It Matters
Liquidity determines how usable a token is for trading and as collateral. Thin liquidity increases risk and volatility. It is a core consideration for any token.
Related Concepts
Token liquidity relates to Liquidity Pools, Market Makers, and Volume. It underpins trading and DeFi usage.